Chancery Division.

[The appeal against this decision is reported at [1997] BTC 247.]

Jacob J.

Judgment delivered 3 February 1995.

Corporation tax – Losses – Payment for release of rights – Another company entitled under agreement to receive ten per cent of pre-tax profits for 15 years – Sum paid for release of right to receive payment – Whether capital payment – Whether income payment wholly and exclusively for the purposes of the company’s trade.

  This was an appeal by Vodafone Cellular Ltd (‘the taxpayer’) and four other members of the Racal group of companies against the decision of a special commissioner.

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