A company engaged in a sugar refining business was entitled to deduct expenses of propaganda campaign directed against the nationalization of the sugar refining business, on the basis that such expenses were "wholly and exclusively laid out or expended for the purposes of the trade" within the meaning of rule 3(a) of the Rules applicable to Schedule D, Cases I and II. Lord Morton stated (p. 39):
"If the assets are seized, the company can no longer carry on the trade which has been carried on by the use of these assets. Thus the money is spent to preserve the very existence of the company's trade."
It was also noted (by Lord Reid at p. 55) that if the proposed nationalization had entailed an acquisition of the shares of the company rather than its assets, the expenditures would have been non-deductible.