Mr Sheppard is a stockbroker. In the late 1980’s he incurred legal costs of ¬¨¬£200,000 odd and had to pay a Stock Exchange fine of ¬¨¬£50,000. The costs were in respect of representation by Counsel and solicitors before a Stock Exchange disciplinary tribunal and an appeal. Mr Sheppard had been accused of various breaches of the Stock Exchange rules most of which were not proved (and a later tribunal ‚Äö√Ñ√∫substantially‚Äö√Ñ√π vindicated him).The Special Commissioner found as a fact that Mr Sheppard had incurred the legal expenditure to save his stockbroking business from destruction. Accordingly, they were deductible under (what is now) s.74(1)(a) ICTA 1988. The fines were not deductible under s.74(1)(e) ICTA 1988 because of IRC v. Alexander von Glehn 12 TC 232.The Court of Appeal upheld the Special Commissioner’s conclusion on the legal fees (the fines were not in issue before the Court of Appeal). Section 74(1)(a) posed a single test. There was no further test of sufficient connection with the trade as Lightman J has suggested in this case. Since the Special Commissioner had made the above findings of fact, the only issue on appeal was whether that was a proper finding on Edwards v. Bairstow 36 TC 307 principles.David Goldberg KC and Hugh McKay appeared for the taxpayer
McKnight v. Sheppard  STC 846 (C.A.)
Gray’s Inn Tax Chambers is deeply saddened to learn of the death of Her Majesty Queen Elizabeth II.
We join the nation in mourning and our condolences are with the Royal Family.
09 Sep 2022
Gray’s Inn Tax Chambers has been nominated in the Chambers UK Bar Awards 2022
Gray’s Inn Tax Chambers are delighted to have been have been nominated for Tax Set of the Year.
31 Aug 2022
The 2022 GITC Review is now available
If you would like to be added to the mailing list for future issues of the GITC Review, please send an email to Jane.Fullbrook@taxbar.com.