Smith (Surveyor of Taxes) v Lion Brewery Co: HL 14 Feb 1911

A brewery company were, as part of their business, and as a necessary incident of the profitable exploitation of such business, the owners of certain licensed premises. These premises, which were let by the company to tenants as tied houses for the retail sale of the company’s beer, ‘had been acquired by the company and were held by them solely for the purposes of their said business.’ Under section 3 of the Licensing Act 1904 the company became compelled to pay a portion of the annual compensation levy, amounting, in respect of the various licensed premises, to pounds 3600. The Income Tax Commissioners allowed a deduction of pounds 1200 from the company’s assessments, and stated the facts above-mentioned in a special case.
Held (on an equal division of the House of Lords affirming the Court of Appeal) that on the facts as stated the compensation levy falling upon the company under the Licensing Act was ‘money wholly and exclusively laid out or expended for the purposes of’ the company’s brewery business, and was therefore a proper deduction in terms of the Income Tax Act 1842, sec. 100, Sched. D, case 2, rule 1.

Judges:

Lord Chancellor (Loreburn), the Earl of Halsbury, Lords Atkinson and Shaw

Citations:

[1911] UKHL 1083, 48 SLR 1083

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 June 2022; Ref: scu.619187