Megarry J discussed whether tips receieved were part taxable as an emolument: ‘I think the question to be tested in this way is only one question. Either the emoluments are within the statutory word ‘therefrom’, as explained by the cases, or they are not. At one stage in the argument, in commenting on Bridges v Bearsley . . Mr Heyworth Talbot said that the question there was whether the employees in the case got the shares as remuneration for services or as personal gifts. In the Hochstrasser case, in the Court of Appeal, Parker LJ had expressed himself in terms of any benefit in money or money’s worth received by an employee during the course of his employment from his employer as being a taxable profit of his employment, with two exceptions, one of which was a gift to him in his personal capacity: see [1959] Ch 22, at page 54. In the House of Lords Lord Simonds, [1960] AC, at page 389, deprecated this approach, saying it was not for the subject to prove that his case fell within exceptions arbitrarily inferred from the Statute, but for the Crown to prove that the tax is exigible. After a little discussion, I think that Mr Heyworth Talbot accepted that the true issue was not the twofold question whether the benefit fell within the taxable category of remuneration for services (as it may briefly be described) or within the non-taxable category of personal gift, but a single question, namely, whether or not it fell within the taxable category of remuneration for services. ‘Personal gift’ is thus not a category which has to be defined or explained, but merely an example of a transaction which will not fall within the taxable category of remuneration for services. In other words, the question is not one of which two strait-jackets the transaction best fits, but whether it comes within the statutory language, or else, failing to do so, falls into the undefined residuary class of cases not caught by the Statute.’
Megarry J
[1972] 3 All ER 1011, 47 TC 680
England and Wales
Cited by:
Considered – Shilton v Wilmshurst (Inspector of Taxes) CA 1990
The taxpayer was a goalkeeper employed by Nottingham Forest Football Club. On his transfer to Southampton, he was paid pounds 75,000. The revenue appealed a finding that this was not taxable under Schedule E.
Held: To be taxcable it had to be . .
Disapproved – Shilton v Wilmshurst HL 7-Feb-1991
The taxpayer was transferred from one football club to another. He was paid andpound;75,000 to persuade him to move. The revenue appealed a decision that this was not a sum taxable as an emolument under Schedule E by the new employer.
Held: . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Leading Case
Updated: 02 November 2021; Ref: scu.199542
