The argument for regarding expenses incidental to the
creation of the lease itself as revenue can probably be put in two
ways, see
BLM37020. The argument for regarding
such expenses as capital in nature is explained at
BLM37025.
Both revenue arguments start from the proposition that issues
of this kind are to be judged in the context of the economic
substance of the business in question and without relying too much
on the niceties of legal form.
Lord Wilberforce in
Strick v Regent Oil, 43 TC 55 (see also
BIM35560), said:
'What is an outgoing of capital and what is an outgoing on account of revenue depends on what the expenditure is calculated to effect from a practical and business point of view rather than upon the juristic classification of the legal rights, if any, secured, employed or exhausted in the process.'
