''Littlewoods Mail Order Stores v Inland Revenue Commissioners''

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1 WLR 1241 is a

UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal ...

case concerning

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Facts

The facts were summarised by Lord Denning MR, in his judgment. Littlewoods was complaining that the whole rent of £42,450 was deductible as an expense wholly for the purpose of trade under s 137 Income Tax Act 1952. The Commissioners rejected this. Plowman J held that the rent payments by Littlewoods were of a revenue character and properly deductible, but relying on a case that was soon reversed by the House of Lords.

Judgment

Sachs LJ and Karminski LJ held that FM’s interposition made no difference to the real nature of the payments, the transfers were not ‘money wholly and exclusively laid out’ for the purpose of trade and not deductible. For the purpose of annual expenditure the courts must look to the true nature of the transaction. Lord Denning MR held more broadly that the wholly owned subsidiary was not in this case a separate legal entity.

Notes

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References

* United Kingdom company case law Court of Appeal (England and Wales) cases 1969 in United Kingdom case law Lord Denning cases

Facts

Judgment

See also

Notes

References