The collapse of the taxpayer's currency trading and banking subsidiary would have effectively terminated the taxpayer's business (through a loss of creditor confidence). In order to prevent such a collapse, the taxpayer agreed that it would contribute £50 million to the subsidiary, sell the shares of the subsidiary to the Bank of England for £1 after which the Bank of England would provide the requisite financial support to the subsidiary. In finding that the £50 million payment of the taxpayer was deductible, Lord Keith stated (p. 326):
"A number of decided cases make it clear that a payment made to get rid of an obstacle to successful trading is a revenue and not a capital payment ... This must be no less true of a payment made to save the whole of an existing business from collapse."
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