The Gazette 1986

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GAZETTE sepTemBER 1986
43. Ibid at p. 15.
44. [1985] I.L.R.M. 200.
45. Ibid at p.202-3. Note, however, the dissenting judgment of
Hederman J. Further examples of the court's method of
interpreting taxation statutes are:
Charles McCann Ltd. -v- O'Culachain (Inspector of Taxes),
(High Court, unreported, Carroll J.). In this case Carroll J.
followed the canons of interpretation stated in Kiernan's case
and held that the process of ripening bananas was not a manu-
facturing process within Part IV, F.A., 1980. See, also, Cronin
(Inspector of Taxes) -v- Strand Dairy Ltd. (H.C., unreported,
18 December, 1985, Murphy J.); Navan Carpets -v- Inspector of
Taxes Court, unreported, 5 November, 1985, Costello J.);
Bairead (Inspector of Taxes) -v- Maxwells of Donegal Ltd. (H)
C., unreported, 19 November, 1985, Carroll J.); Cronin (Inspec-
tor of Taxes) -v- Lunham Bros. (High Court, unreported, 19
June, 1985, Carroll .1.).
46. High Court, unreported, 18 July, 1984, Finlay P.
47. High Court, unreported, 19 April, Carroll J.
48. Ibid at p. 7 of her judgment.
49. See, also, Jacob International -v- O'Cleirigh (Inspector of Taxes)
[1985] 5 I.L.R.M. 651, where it was held that I.D.A. grants were
liable to Corporation Tax and the question of liability was to be
(at p.653) ". . . answered by investigating the true nature and
purpose of the payments and then, regardless of how they may
have been dealt with by the Respondent, deciding whether they
fall into Revenue or Capital".
50. [1983] I.L.R.M. 34 .), [1984] I.L.R.M. 406 .). See,
also, K. Corrigan at [1983] 5 D.U.L.J. (N.S.) 129. Anti-avoidance
legislation was introduced in section 9, F.A., 1984.
51. S.l (i) defines body of persons as "any body politic, corporate or
collegiate, and any company, fraternity, fellowship and society
of persons, whether corporate or not corporate".
52. See Newstead-v- Frost [1980] S.T.C. 123.
53. [1984] LL.R.M.406at p.407.
54. Ibid &X p.408.
55. [1986] 6 I.L.R.M. 116.
56. Ibid at p. 120.
57. 36 T.C. 293 [1953] Ch. 782 and 47 T.C. 580, respectively. In
Sharkey, the House of Lords stated that where trading stock was
disposed of otherwise than by way of trade, the market value
should be credited in the accounts for tax purposes. In Petrotim,
a share dealing company sold investments at a loss to its parent
company and its fellow subsidiary as part of a complex dividend
stripping operation, and claimed the loss as a trading loss. The
English Court of Appeal applied Sharkey to the sale of the
parent, and also held that the sale to the subsidiary was not a true
trading transaction because a sale from one associated company
to another at a gross undervalue could not be said to be in the
ordinary course of the company's trade.
In Lupton\ the House of Lords held that complex dividend
stripping transactions could not be regarded as share dealing
because they were wholly artificial devices remote from trade to
secure tax advantages.
58. [1986] 6 I.L.R.M. 116 at p. 122.
59. ., unreported, 14 May, 1985, Carroll J.
60. 41 T.C. 389 at p.407. Ibid at p.5 of the judgment.
61. [1986] 6 I.L.R.M. 37.
62. Stokes, Kennedy, Crowley.
63. Ibida\ p.41.
64. Ibidatp.39.
65. Ibid, at p.41.
66. Ibid at p.41.
67. High Court, unreported, 11 March 1986, Barrington J.
68. Ibid a\ p.73-4.
69. 9 T.C. 561. The other cases considered were: Gresham Life
Assurance Society -v- Bishop, 4 T.C. 464; Scottish Widows Fund
Life Assurance Society -v- Farmer, 5 T.C. 502; Pitcher -v- Logan
[1914] I J S.R. N.S.W. 24.
70. High Court, unreported, 11 March, 1986, Barrington J. at p. 13.
71. Ibid ax p. 14.
72. Ibid.
73. See Revenue Commissioners -v- Donnelly[1983] I.L.R.M. 329;
InRc. Hibernian Transport Co. Ltd. [1984] I.L.R.M. 583 where
the Court held that Capital Gains Tax and Corporation Tax,
respectively, were not a "necessary disbursement" of a
liquidator under Rule 129 (I) Winding Up Rules 1966. (See,
however, Section 56 F.A. 1983).
74. Cronin (Inspector of Taxes) -v- Youghal Carpets (Yarns) Ltd.,
Supreme Court, unreported, 28 March, 1985. (Availability of
Export sales relief). Breathnach (Inspector of Taxes) -v- McCann
[1984] I.L.R.M. 679 .). See, also, Mac Gioilamhaith
(Inspector of Taxes), High Court, unreported, 2 May,
unreported, 24 July, 1984. McWilliam J. Knockhall Piggeries
-v- Kerrane (Inspector of Taxes), ), unreported, 2 May,
1985, Barrington J.).
75. The taxpayer had undertaken certain share transactions
involving the use of options (s.47 CGTA, 1975) and the
'connected persons' rules (s.33) CGTA, 1975) to produce an
allowable loss for Capital Gains Tax purposes. Counsel for the
taxpayer argued that the Furniss principle should not be
followed because the Appeal Commissioners were bound by the
Duke of Westminister's case, and, alternatively, that the
principle represented bad law, would give rise to double taxation
and would tend to substitute administrative practice for statute
law. The Commissioners held that Furniss did not in fact conflict
with Westminster, as had been pointed out by the law lords in
Ramsay, Burmay and Furniss, and found in favour of the
Revenue Commissioners. This case is under appeal.
The authors understand that Furniss -v- Dawson has
recently been followed in the Circuit Court, The case
was heard in camera. Further details will be provided if
and when available. •
UN I VERS I TY OF THE PAC I F IC
Mc GEORGE S CHOOL OF L AW
International Opportunities
For Practitioners
McGeorge School of Law will offer four summer
seminars for lawyers in 1987 in England,
Scotland, Austria, and Hungary.
The London Institute on Comparative Advocacy
(7-12 June, 1987) provides instruction on the
English legal system and litigation training in
barristers' chambers.
The Edinburgh Institute on International Business
Transactions (28 June - 21 July, 1987) offers
courses on International Business Transactions,
International Taxation, International Commercial
Agreements, and EEC Law.
The Salzburg Institute on International Legal
Studies ( 2 - 1 5 July, 1987) provides courses on
Conflict of Laws, International Trade and
Development, Comparative Criminal Procedure,
International Business Lawyer, and International
Trade and Finance.
The Budapest/Vienna Institute on East/West Law
and Relations (25 July - 4 August, 1987)
emphasizes exploration of trading opportunities,
transaction strategies, and business contacts
between the West and East Europe.
The law school also will offer an expanded
internship program (August-December, 1987),
providing training opportunities in Asia as well as
Europe for young lawyers.
Information on the programs is available from
McGeorge School of Law, 3200 5th Avenue,
Sacramento, California 95817, Telephone (916)
739-7195, Telex 383890 MCGEORGE.
230