Peter Hemingway v The Commissioners for HMRC

Peter Hemingway v The Commissioners for HMRC

The payment was made in connection with the loss of employment-related share options and is taxable under section 477 ITEPA, not section 401 ITEPA. Section 12D TMA does not retrospectively validate the initial return because HMRC ultimately did not treat it as made under section 8 TMA, and the 2019 Tribunal decision is final and conclusive. The appeal is dismissed.

Parties
Appellant: Peter Hemingway; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Decision After Full Hearing
Outcome
Appeal dismissed
Legal Topics
Employment Related Securities, Taxation of Share Options, Income Tax (earnings and Pensions) Act 2003, Taxes Management Act 1970, Finance Act 2019, Jurisdiction of Tribunal, Retrospective Validation of Tax Returns
Tax Law Employment Related Securities Taxation of Share Options Income Tax (earnings and Pensions) Act 2003 Taxes Management Act 1970 Finance Act 2019 Jurisdiction of Tribunal Retrospective Validation of Tax Returns

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Parties

Peter Hemingway

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision After Full Hearing

Legal Issues

  1. 1 Whether the payment following termination of share options is taxable under section 401 ITEPA with relief or under section 477 ITEPA and taxable in full
  2. 2 Whether section 12D Taxes Management Act 1970 retrospectively validated the initial tax return and closure notice, affecting the validity of the second closure notice

Ratio Decidendi

The payment was made in connection with the loss of employment-related share options and is taxable under section 477 ITEPA, not section 401 ITEPA. Section 12D TMA does not retrospectively validate the initial return because HMRC ultimately did not treat it as made under section 8 TMA, and the 2019 Tribunal decision is final and conclusive. The appeal is dismissed.

Court Disposition

Appeal dismissed