Controlling interest turns on voting power, not beneficial ownership, where shares are held by directors as trustees.

For the purpose of Section 13(9) of the Finance (No. 2) Act 1939, the decisive test of a controlling interest is the voting power attached to the shares, not the directors' beneficial ownership. Shares registered in directors' names were to be treated according to the register, and the company was not required to investigate trusts behind it. Shares held by directors as trustees were therefore not excluded merely because the directors were not the sole beneficial owners, and references to other fiscal provisions did not justify importing a beneficial ownership requirement into "controlling interest." The directors were held to have a controlling interest in the company.

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Issues: Whether directors had a controlling interest in the company for the purpose of Section 13(9) of the Finance (No. 2) Act, 1939, where some of the voting shares were held by them as trustees.

Analysis: The decisive test was held to be the voting power carried by the shares and not the directors' beneficial ownership of them. The company's voting shares were registered in the names of the directors, and the company was required to act on the register without investigating trusts behind it. Shares held by directors as trustees were therefore not to be excluded merely because the directors were not the sole beneficial owners. The references to other provisions of the fiscal legislation did not justify reading a beneficial ownership requirement into the words "controlling interest."

Conclusion: The directors had a controlling interest in the company, and the appeal failed.

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