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 Tyco shares by reason of his employment with Tyco, so section 162 did not apply. However, the payment by Tyco to the appellant in excess of market value for the shares was a benefit provided by reason of employment under section 154, and thus chargeable to tax as emoluments.

Citation
[2009] UKFTT 210 (TC)
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 Amending Tax Return
Outcome
Appeal dismissed
Legal Topics
Income Tax, Schedule E, Benefits in Kind, Employee Shareholdings, Share Options, Emoluments, Taxation of Employment Benefits
Tax Law Employment Law Income Tax Schedule E Benefits in Kind Employee Shareholdings Share Options Emoluments +1 more

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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 Amending Tax Return

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 payment in excess of market value on disposal of shares constituted a taxable benefit under section 154 ICTA 1988

Ratio Decidendi

The appellant did not acquire Tyco shares by reason of his employment with Tyco, so section 162 did not apply. However, the payment by Tyco to the appellant in excess of market value for the shares was a benefit provided by reason of employment under section 154, and thus chargeable to tax as emoluments.

Court Disposition

Appeal dismissed

Orders

  • The closure notice stands; the amount of £1,533,391 is chargeable to tax as emoluments under section 154 ICTA 1988.