Mr J Gordon Reid QC and Mr Stephen Oliver QC sitting in Edinburgh.

Decision released 22 April 1998.

Corporation tax – Capital or income expenditure – Taxpayer required by plant lease to maintain bank guarantee of rent payments – Fees paid in connection with guarantee – Whether capital or income expenditure – Fees were income expenditure – Appeal allowed.


The issue was whether rent guarantee payments qualified as deductible expenditure in computing trading profits.

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