B2.453 Losses due to payments under guaranteesSimilar principles apply in relation to payments made under guarantees. Thus, in Lawford & Co1, a sum which was paid under a guarantee to the promoters of an exhibition, in the expectation of obtaining contracts for work in connection with the exhibition, was allowed as a deduction, although no contracts were in fact obtained. This case may be contrasted with Stott2, where the taxpayer acquired shares in a company to secure future contracts and subsequently sold them at a loss. The loss was not allowable as it arose on an investment and was
Similar principles apply in relation to payments made under guarantees. Thus, in Lawford & Co1, a sum which was paid under a guarantee to the promoters of an exhibition, in the expectation of obtaining contracts for work in connection with the exhibition, was allowed as a deduction, although no contracts were in fact obtained. This case may be contrasted with Stott2, where the taxpayer acquired shares in a company to secure future contracts and subsequently sold them at a loss. The loss was not allowable as it arose on an investment and was
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