A company operated a housing scheme for married employees who made transferred from one part of a country to another. Under the scheme an employee might be offered a loan to assist in the purchase of a house and, provided the house was maintained in good repair, payment of the amount of the loss due to depreciation in its value in certain events, including, subject to an option to the company to buy the house at a valuation, its sale for less than the original purchase price in connected in consequence of the employees being transferred. M and J each entered into agreements under the scheme, of wish they had not known when they joined the company. Having sold their houses at a loss on transfer, they received payments from the company, and were assessed thereon to Income Tax under schedule E.
On appeal, it was contended for the Crown that the payments were profits from an employment, or alternatively, in J’s case, chargeable by virtue of section 160 Income Tax Act 1952. The General Commissioners held in M’s case that the payment was not assessable; other General Commissioners held in J’s case that the payment was a profit from his employment.
Held: (1) In the House of Lords in M’s case and in the court of Appeal in J’s case, that the payments were not profits accruing by virtue of an office or employment; (2) in the Chancery Division that the payment in J’s case was not made in respect to expenses within the meaning of section 160.
With reference to a charge to tax under Schedule E the Act on profits or gains from employment, or emoluments, Lord Radcliffe said: ‘For my part, I think that [the meaning of the statutory words] is adequately conveyed by saying that, while it is not sufficient to render a payment assessable that an employee would not have received it unless he had been an employee, it is assessable if it is paid to him in return for acting as or being an employee.’ The placing of a gloss on statutory words may be useful as illustrating the idea which the words express.
Lord Radcliffe
[1959] UKHL TC – 38 – 673, [1959] TR 355, [1960] 2 WLR 63, [1959] 3 All ER 817, (1959) 38 ATC 360, [1960] AC 376
Bailii
Income Tax Act 1952 156(2)
England and Wales
Cited by:
Cited – Shop Direct Group v Revenue and Customs SC 17-Feb-2016
The Court considered the interpretation of the sections which applied corporation tax to post-cessation receipts. Companies had received from the Inland Revenue substantial repayments of VAT together with interest. There had been reorganisations of . .
Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Updated: 30 August 2021; Ref: scu.559977
