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Correspondence from readers on topical subjects.
Another wee dram
I have read your editorial (Taxation, 27 October 2005, page 83) concerning HMRC v William Grant & Sons, Distillers. I am not sure that I can agree with your conclusion that the majority view of the Court of Session is in error.
It seems to me that the purpose of the add-back of depreciation is to establish the profit before any deduction for 'any sum employed or intended to be employed as capital in the trade' i.e. the 'consumption' of the fixed assets.
Correspondence from readers on topical subjects.
Another wee dram
I have read your editorial (Taxation 27 October 2005 page 83) concerning HMRC v William Grant & Sons Distillers. I am not sure that I can agree with your conclusion that the majority view of the Court of Session is in error.
It seems to me that the purpose of the add-back of depreciation is to establish the profit before any deduction for 'any sum employed or intended to be employed as capital in the trade' i.e. the 'consumption' of the fixed assets.
In its place we have an entitlement to capital allowances. In the ordinary run of things any claim for capital allowances will be made on the whole cost of the assets bought for the purpose of the trade. If one were only to add-back on to the profit a proportion of the depreciation...
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