PETER HEMINGWAY v Revenue & Customs (payment following termination of share options) [2023] UKFTT 749 (TC) (05 September 2023)

PETER HEMINGWAY v Revenue & Customs (payment following termination of share options) [2023] UKFTT 749 (TC) (05 September 2023)

The payment was made in connection with the loss of employment-related securities options and is taxable in full under section 477 ITEPA. Section 401(3) ITEPA excludes such payments from the £30,000 exemption. The closure notice is valid because the Tribunal's previous decision is final and HMRC did not treat the original return as made under section 8 TMA, so section 12D TMA does not apply.

Citation
[2023] UKFTT 749 (TC)
Parties
Appellant: Peter Hemingway; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
05 September 2023
Procedural Posture
Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Decision After Hearing
Outcome
Appeal dismissed
Legal Topics
Taxation of Share Options, Employment Related Securities, Income Tax (earnings and Pensions) Act 2003, Taxes Management Act 1970, Finance Act 2019, Jurisdiction of Tribunal, Closure Notices, Retrospective Validation of Tax Returns
Tax Law Employment Law Taxation of Share Options Employment Related Securities Income Tax (earnings and Pensions) Act 2003 Taxes Management Act 1970 Finance Act 2019 Jurisdiction of Tribunal +2 more

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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 (tax Chamber) Substantive Decision After Hearing

Legal Issues

  1. 1 Whether payment following termination of share options is taxable under section 401 ITEPA (with £30,000 exemption) or under section 477 ITEPA (taxable in full)
  2. 2 Whether the closure notice issued by HMRC was valid in light of section 12D Taxes Management Act 1970 and section 87(4) Finance Act 2019

Ratio Decidendi

The payment was made in connection with the loss of employment-related securities options and is taxable in full under section 477 ITEPA. Section 401(3) ITEPA excludes such payments from the £30,000 exemption. The closure notice is valid because the Tribunal's previous decision is final and HMRC did not treat the original return as made under section 8 TMA, so section 12D TMA does not apply.

Court Disposition

Appeal dismissed