Commentary

B2.417 Compensation and damages

Business tax
Business tax | Commentary

B2.417 Compensation and damages

Business tax | Commentary

B2.417 Compensation and damages

Sums which are paid as damages, or as compensation, are generally deductible unless paid in respect of capital assets. In Countess Warwick Steamship Co Ltd1 the company, which already owned one ship, placed a contract for the construction and purchase of a new ship, and paid a deposit on signing the contract. Shortly afterwards a heavy slump in trade occurred, and the company saw no prospect of working the new ship at a profit. It ultimately secured the cancellation of the contract by paying another £30,000. It was held that neither the deposit nor the second

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