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Bestway (Holdings) Ltd v Luff (Chancery Division)

Industrial Buildings Allowance. The taxpayer, which operated cash and carry warehouses, sought to obtain IBAs on the ground that the buildings were used “for the purposes of a trade which consists in the storage … of goods” (CAA 1990, s.7(1)(f)).

Goods were stacked up to ceiling height in the warehouses; on average, around 6 weeks’ supply of each type of goods was held, assuming normal volume of sales

Held: The determining factor is the purpose for which the goods are kept or held. In this case, they were only stored to be available for self-service by customers, which was a necessary incident of the business of a wholesale supermarket; on the other hand, “storage” in s.7(1)(f) CAA 1990 means storage as a purpose and end in itself.

David Goy QC and Aparna Nathan appeared for the taxpayer

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