»Ê¹ÚÌåÓýapp

One of the earliest judgements that people cannot make a profit by trading with themselves was made by the Lord President in Harris v Corporation of Burgh of Irvine [1900] 4 TC 221.

»Ê¹ÚÌåÓýapp Corporation owned a water works that supplied its own town and also two neighbouring towns, Stevenston and Saltcoats. All recipients were charged a water rate and the Revenue sought to tax the surplus.

»Ê¹ÚÌåÓýapp Court of Session held that the surplus from Stevenston and Saltcoats was assessable but not that from the people of Irvine. »Ê¹ÚÌåÓýapp people were the Corporation and it was their water works. So they were supplying water to themselves. »Ê¹ÚÌåÓýapp Lord President compared the situation to that of a person laying on a water supply for their own house and allowing for it in their household accounts, 4 TC at page 233:

»Ê¹ÚÌåÓýapp provider of the supply and the consumer of the water are one and the same individual, and I have never yet heard that a man can make a profit by taking money out of one pocket and putting it into another.

»Ê¹ÚÌåÓýapp concept that there must be two parties to a trading transaction was heard again in the Styles v New York Life Insurance Company [1889] 2 TC 460 (see BIM24035) and CIR v »Ê¹ÚÌåÓýapp Cornish Mutual Assurance Co Ltd [1926] 12 TC 841 (see BIM24040) cases.