Chancery Division.

[The appeal against this decision is reported at [1987] BTC 462.]

Judgment delivered 27 February 1986.

Corporation tax – Chargeable gains – Company covenanted with its subsidiaries not to compete for five years with American company – Payment to company in return for covenant – Whether payment was capital sum accruing on an asset – Whether payment gave rise to chargeable gain for corporation tax purposes – Finance Act 1965, sec. 22(1)(c), (3) (now Capital Gains Tax Act 1979, sec. 19(1)(c), 20).

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