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: The appeal was allowed. A payment was ‘from’ an employment if it was made as a reward for past services or as an inducement to take up employment. There was no necessity to show hat a payment by a third party had any interest in the past performance of the employment contract.
TC Income tax – Schedule E – Lump sum payment by football club to induce its employee to join a new club – Whether an emolument from the employment with the new club – Income and Corporation Taxes Act 1970, ss 181 and 183(1).
Judges:
Lord Templeman
Citations:
[1991] 1 AC 684, [1991] UKHL TC – 64 – 78, [1991] 3 All ER 148, [1991] STC 88
Links:
Statutes:
Income and Corporation Taxes Act 19885
Jurisdiction:
England and Wales
Citing:
Appeal from – 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 . .
Considered – Hamblett v Godfrey (Inspector of Taxes) CA 2-Jan-1986
Affirmed. A single one off lump sum payment was found to be an emolument without consideration as to whether or not it was a capital payment. Miss Hamblett ‘received her payment as a recognition of the fact that she had lost certain rights as an . .
Disapproved – Pritchard (Inspector of Taxes) v Arundale ChD 1971
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 . .
Cited – Bray v Best HL 1989
There was not necessarily subsumed in the concession that a payment constituted an emolument from employment a conclusion that the payment must therefore be for a chargeable period within the aggregate period during which the employment subsisted. . .
Cited by:
Applied – Wilson (HM Inspector of Taxes) v Clayton ChD 29-Apr-2004
Taxability of compensation paid on compromise of claims after dismissal. The employer introduced new terms, withdrawing car benefits. Having refused the new terms the taxpayer was dismissed. A tribunal held him unfairly dismissed. The council . .
Cited – Wilson (HM Inspector of Taxes) v Clayton CA 7-Dec-2004
The claim against the defendant at the tribunal had been settled by a compromise which had then been the subject of an order by the tribunal. The Revenue sought to charge the payment to income tax.
Held: It had been paid ‘in connection with’ . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 11 June 2022; Ref: scu.199540