Fenton’s Trustee v Inland Revenue Commissioners    Income Tax – Bank interest – Loan account – Interest added to loan each half-year – Paid
“out of profits or gains brought into charge” – Income tax Act 1918, s 36, All Schedules
Rules, rr 19, 21.
F borrowed a large sum from a bank, in respect of which the bank opened a separate loan
account. Each half year interest at an agreed rate and without deduction of tax was placed to
the debit of the account and the aggregate amount was then treated as principal for the
following half-year:—