Outside certain trades in the financial sector, fees incurred in
connection with raising, repaying or replacing long term finance,
or rearranging the terms on which such finance is borrowed are
capital on general principles, see Texas Land and Mortgage Co v
Holtham [1894] 3TC255 (see
BIM35580), Montreal Coke &
Manufacturing Co Ltd v Minister of National Revenue (Canada), 1 All
ER 743 PC and Whitehead v Tubbs (Elastics) Ltd [1983] 57TC472 (see
BIM35575). See Beauchamp v Woolworths
PLC [1989] 61TC542 (see
BIM35115) concerning the borderline
between finance that is an ordinary day-to- day incidence of
carrying on the business and long term finance.
The cost of transferring a mortgage on business premises is
capital, Small v Easson [1920] 12TC351.
ICTA88/S77 may, however, provide a statutory relief for many
of the incidental costs incurred in relation to loan finance, see
BIM45800 onwards.
