Litigation Recent Decisions 21/11/95

Treating investment income as a trading receipt

Nuclear Electric v Bradley (1995).

CA (Sir Thomas Bingham MR, Millett J and Schiemann J) 17/10/95.

Summary: Investment income of a trading company is not to be treated for tax purposes as a trading receipt when the company is not a banker, a tour operator or an insurance company.

Revenue appeal from an order of Sir John Vinelott (Ch.D (Vinelott J) 17/2/95. TLR 28/2/95) reversing a decision of Special Commissioners and holding that interest earned on bank deposits made by the taxpayer in the year 31/3/91 was trading income within s.393 (8) Income and Corporation Taxes Act 1988. The result was that s.393 (1) permitted trading losses carried forward from earlier accounting periods to be set off against it for the purposes of corporation tax.