What was being managed?

Dawsongroup Ltd was the parent company of a group of companies. In 1988 25% of its shares were floated on the London Stock Exchange with the rest being owned by D and his family.

In 2000 the company delisted the shares and incurred expenditure of £433 000. It sought to deduct the amount as a management expense in computing its profits on the basis that it was an investment company under TA 1988 s 130.

HMRC did not allow the deduction. The First-tier Tribunal found for HMRC concluding that the appellant’s business was a trading company and that the holding of shares was not a business in its own right. The company appealed.

The Upper Tribunal said the tribunal judge had been correct to say that the de-listing expenditure had to be connected with the...