Receiver’s fees and legal fees in challenging the receiver and claiming against a bank were not a deductible expenditure in calculating gains on the disposal of properties.
The appellant brothers owned nine properties jointly, which were subject to a bank loan. The appellants decided to sell two of the properties and intended using the sale proceeds to reduce the loan. However, the bank subsequently kept the proceeds in a separate account, claiming that the appellants were in breach of the loan terms.
The bank appointed a receiver because of the alleged breach of the loan conditions. The appellants appointed solicitors (C), who advised that the appellants would be unable to get an injunction to prevent the receiver from selling the properties. The appellants appointed another firm of solicitors (N) to advise them on making a claim against the bank.
The receiver sold the properties in May 2010. The
