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Interesting case on deductibility of mgt expenses

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Perhaps only relevant for intermediate holding investment companies (except obiter comments on Camas), but see comments below re potential odd corollaries. A mistake per para 233 not to have had board meetings (you'd think their head of tax would not overlook that), since per para 438 most expenses may have been otherwise deductible.

That said, one wonders why some sort of agency argument was not deployed, since if the parent company had bought, say, a stapler for the intermediate investment holding company then that (if recharged) would presumably be tax deductible for the latter like any similar expense borne on its behalf and there is nothing in law that says such expenses need board meetings etc.

Also, if this was a joint expense for two stand-alone investment companies owned by the same sole shareholder this suggests bizarre adverse consequences for him not having a board meeting with himself for each company. See:

Also, a potential problem if these were pre-incorporation mgt expenses. See:

So due to the above potentially odd corollaries (and I'm sure there are more I've not thought of) this case looks wrongly decided to me and an appeal seems likely.