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There have been a large number of cases that consider the distinction between capital and revenue expenditure, which have helped to build up a body of evidence that the courts will consider when involved in disputes of this nature. However, a review of the case law in this area shows that there are no set tests which can be applied to a wide range of scenarios and each case will be considered on the basis of the facts in hand.

In considering these tests it is essential to bear in mind that no one test is conclusive in any particular case. However, if a particular payment or receipt satisfies every test, there is at least strong reason for the view that the item in question is capital or revenue according to the result which the tests yield. The question has to be looked at reasonably, and, in the ultimate analysis, has to be decided by the Tribunal (formerly General or Special Commissioners) on