.png)
.png)
Our clients have set up a limited company with a principal activity of 'investing' in futures, options and currency for short term gain. We are of the opinion that this is not a valid trade and amounts to speculation/gambling and is thus outside the scope of corporation tax. Furthermore, as the trade is to be treated as exempt, we are of the opinion that this company should not be taken into account when considering associated companies under common control.
Do Taxation readers agree with this treatment?
Query T16,943 — R.C.
Our clients have set up a limited company with a principal activity of 'investing' in futures options and currency for short term gain. We are of the opinion that this is not a valid trade and amounts to speculation/gambling and is thus outside the scope of corporation tax. Furthermore as the trade is to be treated as exempt we are of the opinion that this company should not be taken into account when considering associated companies under common control.
Do Taxation readers agree with this treatment?
Query T16 943 — R.C.
Reply by ANA:
RC is correct that there is case law (Graham v Green [1925] 9 TC 309 Down v Compston [1937] 21 TC 60) which states that gambling is not usually treated as a trade. However it is doubtful whether companies as opposed to individuals can gamble. If they did so...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
