Taxation

MAJOR V BRODIECase LawWhere the tax liability of an English taxpayer depended on the nature of some entity or body structure which was not be under English rectitude the matter was to be driven by reference to the actual legal characteristics of that entity or structure under its own governing law To the extent that the taxpayers liability in the instant case depended on the nature of a partnership under stinting law they were at that placefore sourceize and bound to be taxed by reference to the actual law which governed the partnership . Moreover , under English or Scots law a handle carried on by a partnership was a mountain carried on by its members and separately of them (Major v . BrodieAny workmanshipr who bought an asset for purpose in his trade was the proprietor of it , and inevitably utilize it in part for the persona of being its proprietor . It was , however , legally possible for him to use the asset wholly for the purposes of the trade (Major v . BrodieSummaryThe author set-back recites the facts of the case . Taxpayers Mr . And Mrs Brodie were members of a partnership under the name of Skeldon Estates (SEP . The two entered into loan agreements with a finance company and advance express loans to the SEP . The balance of the loan was however applied as the firm s contribution of capital to another partnership , W Murdoch password , a firm engaged in the trade of farming of which it was a member . Additional loan agreements were by and by entered into by the taxpayers , the amount of which was applied to the SEP which it used to purchase another farm for use by W Murdoch Son in its farming trade but which was not an asset of that partnership .

The taxpayers claimed tax relief under s 362 (1 ) of the Income and stomach Taxes Act 1988 for affair on the loans for the years 1987-88 to 1992-93 as interest on loans to defray capital applied in advance money to the Skeldon Estates partnership for the purposes of the farming trade which it carried on as a partner in W Murdoch Son . The tax revenue denied relief to the taxpayers because they did not meet the requirement of s 362 (1 ) that the money good be used wholly for the purposes of carrying on the trade of the partnership claiming the relief . The Revenue treated the money good to W Murdoch Son partnership as money advanced for the purposes of carrying on a separate trade , and not for SEPAccording to the author , the conditions of s 362 (1 (b ) are satisfied . The provision of the law only when requires that the money be used wholly for the purposes of the trade carried on by the partnership it does not however require that such trade be carried on by the partnership simply . In his words : When the paragraph requires the money to be used wholly for the purposes of the trade carried on by the partnership there is...If you want to get a full essay, order it on our website: Ordercustompaper.com

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