The House was asked whether a warehouse used to store purchases made by the company from its parent company in Austria, was an ‘industrial building or structure’. It was agreed that the facility was used for the storage of materials for use in later manufacture, but the Revenue said that no part of the company’s trade was itself in storage.
Held: There is a clear and important distinction between a trade and an activity undertaken in the course of a trade. The appeal succeeded, and the first instance judgment restored. The allowance was not available to the company. The warehouse was not an industrial building within the Act. (Lords Mance and Scott dissenting)
Lord Hoffmann, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Mance, Lord Neuberger of Abbotsbury
[2008] UKHL 54, Times 02-Sep-2008
Bailii, HL
Capital Allowances Act 1990
England and Wales
Citing:
At SCIT – Maco Door and Window Hardware (UK) Ltd v Revenue and Customs SCIT 25-Oct-2005
SCIT CAPITAL ALLOWANCES – industrial buildings allowances – building used to house goods manufactured by the Appellant’s Austrian parent company for sale to wholesalers in the UK to be used in manufacture – . .
At Divisional Court – Revenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
The Revenue sought to disallow for industrial buildings allowance sums expended on warehouse premises which were to be used to store window products imported for use in other manufacturing processes.
Held: The Revenue’s appeal succeeded. ‘The . .
Appeal from – Maco Door and Window Hardware (UK) Ltd v HM Revenue and Customs CA 19-Jun-2007
Correct classification, for the purposes of capital allowances, of expenditure on a building provided for the business of the appellant. . .
Cited – Kilmarnock Equitable Co-operative Society Ltd v Inland Revenue Commissioners SCS 16-Feb-1966
Income Tax, Schedule D – Profits Tax – Capital allowances – Industrial building or structure – Building for screening and packing coal – Whether coal subjected to a process – Whether building used for purpose ancillary to a retail shop – Income Tax . .
Cited – Bestway (Holdings) Ltd v Luff (Inspector of Taxes) ChD 4-Mar-1998
The taxpayer company operated a wholesale cash and carry business from a number of self-service supermarkets. The stores sold groceries, household goods, tobacco, confectionery and various kinds of alcohol. Although the buildings were not open to . .
Cited – Saxone Lilley and Skinner (Holdings) Ltd v Commissioner of Inland Revenue HL 1967
The taxpayer company was the parent company of a group of subsidiaries, one of which traded as the manufacturer and retailer of shoes. The others either manufactured or sold shoes. The company built a warehouse which was let to a warehousing . .
Cited – Watson Brothers v Hornby 1942
. .
Cited – Sharkey v Wernher HL 1955
Where a trader takes stock from his business for private use or for use in another business which he owns, or where he transfers to his business stock which he owns in some other capacity than that of proprietor of that business, the transfer should . .
Dicta Approved – Graham v Green 1925
Rowlatt J held: ‘a conception of a trade . . differs in its nature, in my judgment, from the individual acts which go to build it up, just as a bundle differs from odd sticks. You may say, I think, without an abuse of language, that there is . .
Cited – Vibroplant Ltd v Holland (HM Inspector of Taxes) CA 1980
The use of the buildings for servicing and repairing the plant which Vibroplant wished to hire out, was an essential part of Vibroplant’s business of plant hire operators and part of their trade. Although not required to decide the point, the court . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 01 November 2021; Ref: scu.271279