Case Law

The cessation of one activity of a company does not necessarily denote the cessation of the trade as a whole. M Cronin (Inspector of Taxes) v Lunham Brothers Ltd 1985 III ITR 363

In Willis v Peeters Picture Frames Ltd 1983 STC 453 it was found that a company that had sold its products directly to customers, mainly wholesalers, and which later sold them through distribution companies had not effected a major change in the conduct of its trades.

In Purchase v Tesco Stores Ltd 1984 STC 304 the company achieved a major increase in turnover as a result of discontinuing the issue of stamps and reducing prices. It was held that a major change in the company’s trade had occurred.

In Pobjoy Mint Ltd v Lane 1984 STC 327 a company was in the business of minting coins and medallions. It purchased its main supplier’s stock of gold and purchased gold directly from wholesalers, resulting in a large increase in stock levels. It was held that there was a major change in the conduct of the trade where stock levels had substantially increased.