The trade purpose test is unlikely to be met in the following circumstances:
Where a payment is made for the purposes of winding up or
disposing of a business (CIR v Anglo Brewing Co Ltd  12TC803
BIM38310). Where, by contrast, a payment
was found, on the facts, to be wholly and exclusively to secure
employee co-operation during the period of trading (in O'Keefe v
Southport Printers Ltd  58TC88 - see
BIM38320) it was an allowable deduction.
In view of the Privy Council decision in Commissioner of Inland Revenue v Cosmotron Manufacturing Co Ltd  70TC292 (see BIM38390) you should not contend that payments made to employees under a pre-existing contractual or statutory obligation are disallowed under the Anglo Brewing principle. The Privy Council declined to follow the Court of Appeal decision disallowing such a payment in Godden v A Wilson's Stores (Holdings) Ltd  40TC161 (see BIM38390), and in consequence Wilson’s Stores should not be cited in support of disallowing such payments.
The Anglo Brewing principle continues to apply to ex-gratia payments and other payments in excess of an employee's pre-existing contractual or statutory entitlement.
Where a payment in compensation for loss of office is connected
with the purchase or sale of a business or a change of controlling
interest by the transfer of shares. There may be evidence of a
purpose other than the trade purpose in documents or agreements
governing the share transfer and the payment of compensation, or in
correspondence etc during the negotiation of such contracts. There
may also be relevant facts in minutes of meetings between the
parties, minutes of meetings of the directors and shareholders,
copies of resolutions passed at shareholders' meetings or copies of
letters from the company to the shareholders. See, for example,
Bassett Enterprises Ltd v Petty  21TC730, - see
BIM38350, James Snook & Co. Ltd v
Blasdale  33TC244, - see
BIM38340, George Peters & Co. Ltd v
Smith, - see
BIM38385), Williams v J J Young &
Son Ltd  41TC264, and George J Smith & Co Ltd v Furlong
 45TC384, see
Where facts about the agreed price of shares, whether this was connected with any compensation payments to directors or controlling shareholders, and any services performed by the directors following take-over were relevant to the decision. Where, for example, retiring directors who are controlling shareholders vote compensation to themselves shortly before or in the process of relinquishing control, it is unlikely their purpose will be solely a purpose of the company's trade. But it will depend on the particular facts, and a payment which is entirely untrammelled by a bargain for transfer of shares may be deductible (see CIR v Patrick Thomson Ltd (in liquidation)  37TC145 - BIM38360).
Where a payment is made by a company owned and controlled by the recipient of compensation, or by persons connected thereto, but if, on the facts, the payment was genuinely made to an unsatisfactory director to induce them to resign, and there is no identifiable non-trade purpose, it is likely to be deductible (Mitchell v B W Noble Ltd  11TC372 - see BIM38370).
Where the payment results from illegal actions (see fines - BIM42515), Cattermole v Borax Chemicals Ltd  31TC202 (see BIM38525) and Fairrie v Hall  28TC200 - see BIM38530), or from a breach of contract or legal action outside the trading activities (see Knight v Parry  48TC580 (see BIM38545) and Hammond Engineering Co. Ltd v CIR  50TC313 - see BIM38550). But a payment which is solely for trade purposes and not by way of penalty for an infraction of the law is deductible, see G Scammell & Nephew Ltd v Rowles  22TC479 - (see BIM38535) and Golder v Great Boulder Proprietary Gold Mines Ltd  33TC75 - (see BIM38540).