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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Corporation Tax - From: 1930 To: 1959

This page lists 9 cases, and was prepared on 27 May 2018.

 
Simpson (HM Inspector of Taxes) v The Grange Trust, Ltd (1935) 19 TC 231; [1935] UKHL TC_19_231
15 Mar 1935
HL
Wright L
Corporation Tax, Financial Services
Income Tax - Investment trust company not assessable under Case I of Schedule D - Claim for relief in respect of expenses of management - Income Tax Act, 1918 s 8
Wright L said: "An ordinary trading company assessed on the balance of its profits and gains for the year under Schedule D, Case I, is entitled, in order to arrive at the balance, to an allowance for outlays incurred for the purpose of earnings its profits: the companies or concerns enumerated in the section whose income is in the main taxed by deduction, would be placed at a disadvantage if no allowance was made to them for management expenses."
Income Tax Act 1918 33(1)
1 Citers

[ Bailii ]
 
Cull v Commissioners of Inland Revenue [1940] AC 51
1940
HL
Lord Atkin, Lord Wright
Income Tax, Corporation Tax
Lord Atkin said: "My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders. The latter are not chargeable with income tax on dividends, and they are not assessed in respect of them. The reason presumably is that the amount which is available to be distributed as dividend has already been diminished by tax on the company, and that it is thought inequitable to charge it again."
Lord Wright said: "the shareholder is not taxed under Schedule D in respect of that part of his income which consists of dividends. The profits have been charged to tax in the hands of the company and that fact is deemed to redound to his benefit."

 
Watson Brothers v Hornby (1942) 24 TC 506
1942


Corporation Tax

1 Citers


 
Dale (HM Inspector of Taxes) v Johnson Brothers (1951) 32 TC 487
1951

Sheil J
Corporation Tax
(Year?) The taxpayer claimed an industrial buildings allowance against his tax liabilities for a warehouse used as storage as a trade in itself. Two thirds of the use was for storage of finished goods awaiting collection or delivery. The taxpayers were the sole selling agents for various manufacturers and were obliged under the agreement with them to store sufficient products to enable prompt delivery to be made to customers. They relied on s.8(1)(d)(iii) of the 1945 Act. Held: The claim was rejected. The trade carried on at the warehouse was not storage alone, but also the disposal of the goods as selling agents.
Sheil J said: "That Section, so far as it is invoked here, contemplates that the use of the building must be for a trade and that trade, so far as the use is concerned, must be a storage trade. It will not do that the trade is storage plus something else or something else plus storage. It must be simply a keeping or custody. When one considers the use of the two-thirds of this building it cannot be said that there was simply a keeping or custody in that part of it. The agreements required a constant active movement of the goods by the Respondents, a disposal of them by the Respondents "
Income Tax Act 1945 8
1 Citers


 
Inland Revenue v Dowdall O'Mahoney and Co, Ltd [1952] UKHL TC_33_259
25 Feb 1952
HL

Corporation Tax
HL Excess Profits Tax - Branch business in United Kingdom carried on by company resident in Eire - Eire taxes paid on profits of main business and of United Kingdom branches-Whether deduction from profits of United Kingdom branches permissible in respect of proportion of such taxes attributable to those profits.
[ Bailii ]
 
Union Corporation, Ltd v Inland Revenue; Johannesburg Consolidated Investment Co Ltd v Inland Revenue; Trinidad Leaseholds, Ltd v Inland Revenue [1953] UKHL TC_34_207
9 Mar 1953
HL

Corporation Tax
HL Profits Tax - Companies registered or operating abroad but also resident in the United Kingdom - Whether "ordinarily resident outside the United Kingdom" - Finance Act, 1947 (10 & 11 Geo. VI, c. 35), Section 39 (1).
Finance Act 1947
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Sun Life Assurance Society v Davidson [1956] 1 Ch 524
1956
CA
Romer LJ
Corporation Tax
The phrase "general management" extended further than "management" and included what was done at the lower levels of a company's executive structure.
Romer LJ said: "The ratio decidendi of Golder's Case (Capital and National Trust Ltd. v. Golder (H.M. Inspector of Taxes)) (1949) 31 TC 265, as it seems to me, was that the phrase 'expenses of management', as used in s. 33 of the Income Tax Act, 1918, means, in effect, the expenses of the managers of a company (who would normally be the board of directors) and not the expenses incurred by the company in the general management of its business ; in other words, the phrase is directed to the expenses involved in shaping policy and in other matters of managerial decision and does not extend to expenses subsequently and consequently incurred at lower levels of the company's executive structure."
1 Cites

1 Citers


 
Inland Revenue v Butterley Co Ltd [1956] UKHL TC_36_411
19 Apr 1956
HL

Corporation Tax
Profits Tax - Computation of profits - Company carrying on a number of trades-Nationalisation of colliery undertaking - Interim income payments under Coal Industry Acts, 1946 and 1949 - Finance Act, 1937 (1 Edw. VIII & 1 Geo. VI, c. 54), Sections 19 and 20 (1) and Fourth Schedule, Paragraph 7 ; Finance Act, 1947 (10 <& 11 Geo. VI, c. 35), Section 32 (1).
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Sun Life Assurance Society v Davidson [1958] AC 184; [1957] UKHL TC_37_330
4 Jul 1957
HL
Lord Somervell, Lord Reid
Corporation Tax
The court considered the question of what was meant by the phrase 'expenses of management' Held: The phrase (s75) could be seen "as apt to cover the expenses which would normally be deductible in respect of its life assurance business if an assurance company carrying on life assurance business was assessed as a trade." Section 33(1) "makes it clear that some only of the expenses which would be deductible under Case I and the relevant rules are deductible under this special method." Lord Reid: "I do not think that it is possible to define precisely what is meant by 'expenses of management'. It has not been argued that these words have any technical or special meaning in this context. They are ordinary words of the English language, and, like most such words, their application in a particular case can only be determined on a broad view of all relevant matters…. looking to the purpose and content of the section it appears to me that the phrase has a fairly wide meaning so that, for example, expenses of investigation and consideration whether to pay out money either in settlement of a claim or in acquisition of an investment must be held to be expenses of management…. It seems to me more reasonable to ask, with regard to a payment, whether it should be regarded as part of the cost of acquisition, on the one hand, or, on the other hand, something severable from the cost of acquisition which can properly be regarded as an expense of management."
Income Tax Act 1918 33(1) 75
1 Cites

1 Citers

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