Uppal v Revenue & Customs [2010] UKFTT 215 (TC) (13 May 2010)

Uppal v Revenue & Customs [2010] UKFTT 215 (TC) (13 May 2010)

The tribunal held that the termination payment was partnership property and received by the appellant and his wife in equal shares. However, under s 401(1) ITEPA, the share received by the spouse is also taxable as employment income of the appellant, so the whole payment (subject to the £30,000 exemption) is taxable in the appellant's hands. Apportionment between capital and revenue is irrelevant as s 401 applies to the whole payment regardless of its nature.

Citation
[2010] UKFTT 215 (TC)
Parties
Appellant: Lakbir Singh Uppal; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 May 2010
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Employment Income, Termination Payments, Partnerships, Capital Gains Tax
Tax Law Income Tax Employment Income Termination Payments Partnerships Capital Gains Tax

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Parties

Lakbir Singh Uppal

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether termination payment received by appellant as sub-postmaster is taxable wholly as employment income under s 403 ITEPA 2003
  2. 2 Whether payment is partnership property and should be apportioned between appellant and his wife
  3. 3 Whether any part of the payment is capital in nature and not taxable as employment income

Ratio Decidendi

The tribunal held that the termination payment was partnership property and received by the appellant and his wife in equal shares. However, under s 401(1) ITEPA, the share received by the spouse is also taxable as employment income of the appellant, so the whole payment (subject to the £30,000 exemption) is taxable in the appellant's hands. Apportionment between capital and revenue is irrelevant as s 401 applies to the whole payment regardless of its nature.

Court Disposition

Appeal dismissed

Orders

  • HMRC’s amendment to the appellant’s self-assessment for the year ended 5 April 2005 is upheld.