Duckmanton v Revenue & Customs (Rev 1) [2011] UKFTT 664 (TC) (13 October 2011)

Duckmanton v Revenue & Customs (Rev 1) [2011] UKFTT 664 (TC) (13 October 2011)

The legal expenses were not incurred wholly and exclusively for the purposes of trade, as the main purpose was to defend criminal charges and preserve personal liberty and reputation, not solely to preserve the business; therefore, the expenses are disallowed under s 74 ICTA 1988 and s 34 ITTOIA 2005.

Citation
[2011] UKFTT 664 (TC)
Parties
Appellant: Paul Duckmanton; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 October 2011
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal disallowed
Legal Topics
Income Tax, Corporation Tax, Exemptions and Reliefs, Deductibility of Legal Expenses
Tax Law Income Tax Corporation Tax Exemptions and Reliefs Deductibility of Legal Expenses

Case Brief

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Parties

Paul Duckmanton

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether legal costs incurred in defending criminal charges and preserving trade interests were incurred wholly and exclusively for the purposes of trade under s 74 ICTA 1988 and s 34 ITTOIA 2005

Ratio Decidendi

The legal expenses were not incurred wholly and exclusively for the purposes of trade, as the main purpose was to defend criminal charges and preserve personal liberty and reputation, not solely to preserve the business; therefore, the expenses are disallowed under s 74 ICTA 1988 and s 34 ITTOIA 2005.

Court Disposition

Appeal disallowed

Orders

  • Expenses claimed for legal and professional fees are disallowed for tax purposes under s 74 ICTA 1988 and s 34 ITTOIA 2005.