James Snook & Co Ltd v Blasdale

CA 1952 33 TC 244

A company with a number of director shareholders were being sold. The purchaser was purchasing the shares for cash settlement. As part of the deal, two director shareholders would receive part of the cash as compensation for loss of office, thus being classed as staff costs and an allowable expense. This treatment was rejected on the direct link between the cash and the sale of shares and therefore it was treated as a capital disposal.