Citation(s) [1969] 1 WLR 1241 | ||
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Judge(s) sitting Lord Denning MR, Sachs LJ and Karminski LJ Ruling court Court of Appeal of England and Wales Similar DHN Food Distributors Ltd v Tow, Woolfson v Strathclyde Regional, Ord v Belhaven Pubs Ltd, Jones v Lipman, Gencor ACP Ltd v Dalby | ||
Littlewoods Mail Order Stores v IRC [1969] 1 WLR 1241 is a UK company law case concerning piercing the corporate veil.
Contents
Facts
The facts were summarised by Lord Denning MR, in his judgment.
Littlewoods was complaining that the whole rent of £42,450 was deductible as an expense wholly for the purpose of trade under s 137 Income Tax Act 1952. The Commissioners rejected this. Plowman J held that the rent payments by Littlewoods were of a revenue character and properly deductible, but relying on a case that was soon reversed by the House of Lords.
Judgment
Sachs LJ and Karminski LJ held that FM’s interposition made no difference to the real nature of the payments, the transfers were not ‘money wholly and exclusively laid out’ for the purpose of trade and not deductible. For the purpose of annual expenditure the courts must look to the true nature of the transaction. Lord Denning MR held more broadly that the wholly owned subsidiary was in this case a separate legal entity.