ENSIGN TANKERS LTD Vs. STOKES

JUDGEMENT

(1.) who allowed an appeal by the tax-payer company, Ensign Tankers (Leasing) Ltd., against a decision of the special commissioners. The commissioners held that the taxpayer company was not entitled to claim initial allowances under section 41(1) of the Finance Act 1971 in respect of two transactions related to two films (Escape to Victory and Outland). Section 41(1) provides;

(2.) Subject to the provisions of this chapter, where - (a) a person carrying on a trade incurs capital expenditure on the provision of machinery or plant for the purposes of the trade, and (b) in consequence of his incurring the expenditure, the machinery or plant belongs to him at some time during the chargeable period related to the incurring of the expenditure, there shall be made to him for that period an allowance (in this chapter referred to as a first-year allowance which shall be of an amount determined in accordance with section 42 below,.....

(3.) The transactions in question were carried out by two limited partnerships-one for each film-in each of which the taxpayer company as a partner. It is common ground that, for the purposes of section 41, the person referred to in that section is the partnership. The questions which arise are (a) was the partnership a person carrying on a trade, (b) did the film belong to the partnership and (c) did the partnership incur expenditure in the purchase of the film ?