Smith v Revenue & Customs [2009] UKFTT 210 (TC) (13 August 2009)

Smith v Revenue & Customs [2009] UKFTT 210 (TC) (13 August 2009)

The appellant did not acquire his Tyco shares in pursuance of a right or opportunity available by reason of his employment with Tyco, so section 162 did not apply. However, the excess paid by Tyco for the shares was a benefit provided by reason of employment within section 154, and thus chargeable to tax as an emolument.

Citation
[2009] UKFTT 210
Parties
Appellant: John Patrick Smith; Respondents: The Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 August 2009
Procedural Posture
Income Tax Appeal (first Tier Tribunal Tax) / Decision on Appeal Against Closure Notice
Outcome
Appeal dismissed
Legal Topics
Benefits in Kind, Employee Shareholdings, Income Tax on Employment Benefits, Schedule E Charge, Share Option Taxation
Tax Law Employment Law Benefits in Kind Employee Shareholdings Income Tax on Employment Benefits Schedule E Charge Share Option Taxation

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Parties

John Patrick Smith

Appellant

The Commissioners for Her Majesty's Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal (first Tier Tribunal Tax) / Decision on Appeal Against Closure Notice

Legal Issues

  1. 1 Whether Tyco shares were acquired by the appellant in pursuance of a right or opportunity available by reason of his employment within section 162 ICTA 1988
  2. 2 Whether the excess consideration paid by Tyco for the appellant's shares constituted a benefit within section 154 ICTA 1988

Ratio Decidendi

The appellant did not acquire his Tyco shares in pursuance of a right or opportunity available by reason of his employment with Tyco, so section 162 did not apply. However, the excess paid by Tyco for the shares was a benefit provided by reason of employment within section 154, and thus chargeable to tax as an emolument.

Court Disposition

Appeal dismissed

Orders

  • The closure notice stands; the excess payment is taxable as a benefit under section 154 ICTA 1988.