Fines or penalties and related expenditure incurred by a trader are generally not allowable, either as being incurred other than wholly or exclusively for the purposes of the trade or as representing a loss not arising from the trade.
In Borax and Chemicals Ltd1, the company and certain of its officers were charged under American anti-trust laws and, as a result, paid certain fines and legal expenses. On the facts found by the Commissioners the court decided that the expenditure was not incurred wholly and exclusively for the purposes of the trade (except so far as a small amount of legal expenses were concerned). However, the decision did not follow automatically from the fact that there was an alleged breach of law in the United States or elsewhere.
In Warnes & Co Ltd2 and Alexander von Glehn & Co Ltd3, the companies paid a
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