1. This article is about premiums for fee protection insurance relating to the costs of possible future tax enquiries. We have been asked to clarify our views on whether such premiums are allowable as a deduction in computing the profits or losses chargeable to tax under Case I/II Schedule D. In particular we have been asked whether our views on this issue are affected by the decision in McKnight v Sheppard (71 TC 419). The comments in this article apply equally to the computation of profits/losses of a Schedule A business.
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