Commentary

B2.505 Anticipated and contingent losses

Business tax
Business tax | Commentary

B2.505 Anticipated and contingent losses

Business tax | Commentary

B2.505 Anticipated and contingent losses

In H Ford1, the company entered into contracts for the sale of grain from Argentina and undertook liability for detention of the ships. Labour troubles ensued and the ships were delayed. The company never admitted liability for a claim, and ultimately never paid it, but deducted the amount of the claim in its accounts. The amount of the claim was an anticipated liability only and was therefore inadmissible for tax purposes.

In Whimster2, the company, which operated ships on time charter, anticipated that charter and freight rates would fall. It deducted an amount, representing the difference

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