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Bestway (Holdings) Ltd v Luff (Chancery Division) 20 February 1998

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