Commissioners of Inland Revenue v Toll Property Company, Ltd ((in Liquidation))

JurisdictionScotland
Judgment Date18 June 1952
Date18 June 1952
CourtCourt of Session (Inner House - First Division)

COURT OF SESSION (FIRST DIVISION)-

(1) Commissioners of Inland Revenue
and
Toll Property Co., Ltd. (In Liquidation)

Income Tax, Schedule D, and Profits Tax - Purchase and sale of one property - Adventure in the nature of trade.

The Company was formed in 1942 and soon after its formation bought one property consisting of shops and tenements. The purchase and the sale of property were within the objects of the Company, as set out in its memorandum of association. In 1946 part of this property was sold at a profit, which was assessed to Income Tax. In 1949 the remainder of the property was sold at a profit, and in 1950 the Company went into liquidation, having owned only the one property. Whilst it held the property the Company derived an income from it.

On appeal, a majority of the General Commissioners considered that the profit in 1949 was an appreciation of a capital asset, and decided that the purchase and sale were not "in the nature of trade".

Held, that the purchase and sale of the property was an adventure in the nature of trade, the profit on which was assessable to Income Tax.

CASE

Stated for the opinion of the Court of Session as the Court of Exchequer in Scotland, under the Income Tax Act, 1918, Section 149, and the Finance Act, 1937, Fifth Schedule, Part II, Paragraph 4.

At a meeting of the Commissioners for the General Purposes of the Income Tax for the Division of the City of Glasgow held at 280 George Street, Glasgow, on 18th June, 1951, Toll Property Co., Ltd. (in liquidation) of 27, Whitevale Street, Glasgow, E.1 (hereinafter called "the Company") appealed against assessments to Income Tax under Schedule D of the Income Tax Act, 1918, for the year ended 5th April, 1950, in the sum of £2,789 and to Profits Tax for the chargeable accounting period ended 31st May, 1949, in the sum of £1,384. The said assessments were made on the Company in respect of profits arising from the purchase and sale of property.

I. The following facts were admitted, or proved:-

  1. (2) The Company was incorporated as a private company on 9th February, 1942.

  2. (3) The objects of the Company as set forth in its memorandum of association are, inter alia, as follows-

    1. (i) To acquire by purchase, feu, lease, exchange or otherwise for investment or resale and to traffic in land, buildings or other property, real or heritable, and of any tenure or description

      situate in Great Britain and any estate, right or interest therein and to turn the same to account as may seem expedient and in particular by preparing building sites and by constructing, reconstructing, altering, improving, decorating, furnishing and maintaining tenements, offices, flats, houses, factories, warehouses, shops, works, wharves and buildings of all kinds and by consolidating or sub-dividing properties and by selling, feuing, leasing, and disposing of same.
    2. (ii) Without prejudice to the foregoing generality to acquire by purchase or otherwise all and whole that tenement property situated at and forming Nos. 22 to 38, Paisley Road West, Glasgow, under exception of those shop premises situated at and forming Nos. 22, 34 and 38, Paisley Road West, aforesaid.

    3. (iii) To create, buy, sell and deal in feuduties, ground annuals, ground rents and real burdens of all kinds and to make advances upon the security of real or heritable property of all kinds or any interest therein and generally to deal in and traffic by way of sale, lease, exchange or otherwise in all such property and to manage, factor and administer the same.

    4. (iv) To advance and lend money to builders, tenants and others who may be willing to build on or lease and improve any land, buildings or other such real heritable or leasehold property of any kind in which the Company is interested and generally to advance money to such persons and on such terms as may be arranged.

    5. (v) To carry on any other business whatsoever similar to the main business of the Company, as specified in sub-clauses (i), (ii), (iii) and (iv) hereof, or which can be advantageously or conveniently carried on by the Company by way of extension of or in connection with any such main business as aforesaid, or is calculated directly or indirectly to develop any branch of the business of the Company or to increase the value of or render more profitable any of the assets, properties or rights of the Company.

(4) The authorised and issued share capital of the Company is £100, divided into shares of £1 each. The shareholders of the Company are Samuel B. Allison and J. Williams who each hold 50 shares.

(5) Samuel B. Allison is managing director and J. Williams is a director of Samuel B. Allison, Ltd., demolition...

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8 cases
  • Edwards (Inspector of Taxes) v Bairstow
    • United Kingdom
    • House of Lords
    • 25 July 1955
    ... ... 1st District, Bull Green House, Halifax, in the County of York, one of Her Majesty's ... year, appeals were taken to the Commissioners for the General Purposes of the Income Tax for ... with the International Export Company. They said they were prepared to buy the whole of ... of Lords …" And it is clear that the Revenue Authorities were anxious to bring this case to ... v. Toll Property Co., Ltd. 34 T.C. 13 , where he says ... ...
  • Edwards (HM Inspector of Taxes) v Bairstow & Harrison
    • United Kingdom
    • Chancery Division
    • 25 July 1955
    ...appears to me to propound the same principle as that adopted by Lord Cooper in Commissioners of Inland Revenuev. Toll Property Co., Ltd., 34 T.C. 13, where he says (at pages 18-9):- Keeping in view the nature of the transaction, the purpose with which the Company was floated and the objects......
  • Reeves v Evans, Boyce and Northcott Syndicate
    • United Kingdom
    • Chancery Division
    • 8 December 1971
    ...to the following cases:Hudson's Bay Co. v. Stevens TAX(1909) 5 T.C. 424Commissioners of Inland Revenue v. Toll Property Co. Ltd. TAXSC34 T.C. 13; 1952 S.C. 387Rand v. Alberni Land Co. Ltd. TAX(1920) 7 T.C. 629;Eames v. Stepnell Properties Ltd. TAXWLR43 T.C. 678; [1967] 1 W.L.R. 593Pilkingto......
  • Reeves (HM Inspector of Taxes) v Evans, Boyce and Northcott Syndicate
    • United Kingdom
    • Chancery Division
    • 8 December 1971
    ...to the following cases:Hudson's Bay Co. v. Stevens TAX(1909) 5 T.C. 424Commissioners of Inland Revenue v. Toll Property Co. Ltd. TAXSC34 T.C. 13; 1952 S.C. 387Rand v. Alberni Land Co. Ltd. TAX(1920) 7 T.C. 629;Eames v. Stepnell Properties Ltd. TAXWLR43 T.C. 678; [1967] 1 W.L.R. 593Pilkingto......
  • Request a trial to view additional results
1 books & journal articles
  • Preliminary Sections
    • Nigeria
    • DSC Publications Online Nigerian Supreme Court Cases. 1968 Preliminary Sections
    • 12 November 2022
    ...of Inland Revenue v. Hyndland Investment Co. Ltd. (1929) 14 T.C. 694 211 Commissioner cf Inland Revenue v. Toll Property Co. Ltd. (1952) 34 T C 13 211 Cooke v. Lexley 161 E R 2 14 Craig v. Craig (1967) N M L R 52 202 Crane v. Director of Public Prosecutions 15 C.A.R. 183; (1921) A.C. 299. 2......

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