½Û×ÓÊÓƵ

If expenditure is incurred merely to protect assets of the trade, without altering or enhancing them, or creating a new asset, the expenditure is revenue expenditure and is therefore deductible. Thus, in Borax Consolidated Ltd¹, the company held all the shares in an American company, and the trade of the latter was treated for tax purposes as a branch of the appellant company's business. For the purposes of its own business the appellant company acquired land in the United States and put its subsidiary company into possession thereof. An action was instituted in the American courts against the company and its subsidiary company claiming that the company's title to the land, and to the buildings erected thereon, was bad. The subsidiary company incurred legal expenses in defending the action; and the court decided that the amount of these expenses was money wholly and exclusively laid out for the purposes of the trade and was, therefore, deductible.

The decision in Borax Consolidated Ltd was applied in Linslade Post Office & General Store²,