MacDonald (HM Inspector of Taxes) v Dextra Accessories Ltd and others: CA 28 Jan 2004

The company had set up a trust for the benefit of its employees. The Inspector sought to tax the payments made into the trust as ’emoluments’
Held: The appeal was allowed. The payments were ‘potential emoluments’ which were held by the trustees ‘with a view to their becoming relevant emoluments’. The employers were not allowed to deduct the payments from their income for Corporation Tax purposes.
Lord Justice Jonathan Parker Lord Justice Potter Mr Justice Charles
Times 03-Feb-2004, [2004] EWCA Civ 22, Gazette 04-Mar-2004, [2004] STC 339
Finance Act 1989 43
England and Wales
Appeal fromMacDonald (Inspector of Taxes) v Dextra Accessories Ltd and Others ChD 16-Apr-2003
The inspector sought to disallow charging to current tax period payments made by the employer to an employee benefit trust.
Held: The payments were not made and held by the trustees ‘with a view to becoming relevant emoluments’ within the . .
CitedMacNiven (Inspector of Taxes) v Westmoreland Investments Ltd HL 15-Feb-2001
The fact that a payment of interest was made only to create a tax advantage did not prevent its being properly claimed. Interest was paid for the purposes of setting it against tax, when the debt was discharged. A company with substantial losses had . .
CitedPeat -v Gresham Trust Ltd HL 1934
The phrase ‘with a view of’ in the context of an assertion of making a faudulent preference required it to be established what the person’s dominant intention was to make such. In order to determine what, on the probabilities, was the ‘dominant, . .
CitedIn re Cutts (a bankrupt); Ex parte Bognor Mutual Building Society CA 1956
Decisions are often made not for a single reason but for a number.
The phrase ‘with a view of’ a fraudulent preference was given to one creditor over others, it required it to be established what the person’s dominant intention was.
Lord . .
CitedEMI Group Electronics Ltd v Coldicott (Inspector of Taxes) CA 16-Jul-1999
A payment made by an employer on the termination of a contract in lieu of notice was taxable as an emolument, where the right to notice was reserved by the employment contract The reason for a notice period from an employee’s point of view was not . .
At Special CommissionersDextra Accessories Ltd and others v Inspector of Taxes SCIT 25-Jul-2002
SXIT EMPLOYEE BENEFIT TRUST – whether deduction of contributions postponed until taxable as emoluments under FA 1989 s.43(11) – no – whether sub-funds in favour of directors who controlled the company taxable as . .

Cited by:
Appeal fromHM Inspector of Taxes v Dextra Accessories Ltd HL 7-Jul-2005
The taxpayer companies had paid funds into a trust for employees. They sought to set off the payments against their liability to corporation tax. The revenue argued that they were deductible only in the year in which they were paid to the employees. . .

These lists may be incomplete.
Updated: 11 January 2021; Ref: scu.192287