Judges:

Lloyd LJ

Citations:

[2010] EWCA Civ 1538, [2010] STI 3244, [2011] STC 456, [2011] BTC 1

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 144A, Income Tax (Earnings and Pensions Act) 2003 222

Jurisdiction:

England and Wales

Income Tax

Updated: 31 August 2022; Ref: scu.427973

ECJ Free movement of capital – Income taxes – Transmission of buildings anticipated inheritance – Payment of an annuity to the donor – Taxation of income from the rental property – Deductibility of rent paid to the donor – Condition of be fully taxable in the Member State concerned – unjustified restriction on freedom of movement of capital.

Citations:

C-450/09, [2010] EUECJ C-450/09, [2011] EUECJ C-450/09

Links:

Bailii, Bailii

Jurisdiction:

European

Income Tax

Updated: 31 August 2022; Ref: scu.427344

INCOME TAX – PAYE – NIC – whether a tax saving scheme in which employees agreed to reduced wages linked to receipt of dividends was effective – scheme not put into effect – appeal dismissed.

Citations:

[2010] UKFTT 422 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426600

INCOME TAX – SURCHARGE FOR LATE PAYMENT OF TAX – Whether Appellant had reasonable excuse for default – No – Appeal dismissed.

Citations:

[2010] UKFTT 461 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426602

Payment of licence fees by company – whether income of inventor or a third party – whether trading income of inventor (yes) – whether employment income of inventor (no) – whether annual payments (no) – whether assessments defective or invalid (no)

Citations:

[2010] UKFTT 419 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426599

FTTTx Income tax – Employment Income – cars with finance agreements in the name of a limited company – all finance payments entered in directors loan accounts -were cars made available within meaning of s114 ITEPA – yes, car benefit charges apply. Fuel allowances paid then excluded from approved payments s120 ITEPA -subsequent transfer of car to a director is subject to tax under s206 ITEPA. Cost of hire of executive box at football club – was there a benefit in kind to directors-no. Appeals allowed in part

Citations:

[2010] UKFTT 503 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426615

INCOME TAX – adjustments to self assessment – discovery assessment – fairness of estimates by HMRC – appeal dismissed

Citations:

[2010] UKFTT 428 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426586

Self assessment – under-declaration of takings – question of fact – taxi driver – whether takings and profit were understated – no – appeal granted

Citations:

[2010] UKFTT 387(TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426553

Income Tax – Schedule D – Journalist and author – Expenses – Whether premises costs incurred whilst working and writing a book qualified for a deduction against income from the business – Section 34 Income Tax (Trading and Other Income) Act 2005

Citations:

[2010] UKFTT 429 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426580

INCOME TAX AND NI – understated self-assessment – appeal against amendments and against penalty under section 95 TMA – burden of showing amendment should not stand not discharged – appeal dismissed

Citations:

[2010] UKFTT 459 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426582

Surcharges for late payment of income tax – Whether inability to pay constituted a reasonable excuse – No – Appeal dismissed – Section 59C Taxes Management Act 1970

Citations:

[2010] UKFTT 392 (TC)

Links:

Bailii

Statutes:

Taxes Management Act 1970 59C

Jurisdiction:

England and Wales

Income Tax

Updated: 27 August 2022; Ref: scu.426542

Tax credits and family credit

Citations:

[2010] UKUT 323 (AAC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 25 August 2022; Ref: scu.425175

The increase of percentage of time from part time to full time occupation, could not itself constitute a material change so as to be treatable as a new profession.

Citations:

Times 25-Nov-1997, Gazette 19-Nov-1997

Jurisdiction:

England and Wales

Income Tax

Updated: 24 August 2022; Ref: scu.80258

In computing company’s tax liability excessive pay not deductible.

Citations:

Times 28-May-1993

Statutes:

Income and Corporation Taxes Act 1970 130

Jurisdiction:

England and Wales

Citing:

Appealed to – Earlspring Properties Ltd v Guest (Inspector of Taxes) CA 1-May-1995
A close company has an additional obligation to notify the Revenue that a loan was chargeable to tax, and in default, it was liable for interest. . .

Cited by:

Appeal from – Earlspring Properties Ltd v Guest (Inspector of Taxes) CA 1-May-1995
A close company has an additional obligation to notify the Revenue that a loan was chargeable to tax, and in default, it was liable for interest. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 24 August 2022; Ref: scu.80214

FTTTx Income Tax : Late payment – initial surcharge – no reasonable excuse – Appeal refused.

Citations:

[2010] UKFTT 369 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 23 August 2022; Ref: scu.422355

FTTTx Income Tax – surcharge for late payment of tax – s.59(C)(2) TMA 1970 – erroneous advice by tax advisor – whether a reasonable excuse – no – whether subsequent carry back losses disturbed surcharge penalty already assessed – no.

Citations:

[2010] UKFTT 376 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 23 August 2022; Ref: scu.422361

Contractors Return – Late filing penalty – Change of accountant – New accountant unable to obtain information from previous accountant – whether reasonable excuse throughout period of default – No – Whether Return filed without unreasonable delay after excuse ceased – No – Appeal dismissed – sections 98A and 118(2) Taxes Management Act 1970

Citations:

[2010] UKFTT 185 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 23 August 2022; Ref: scu.422204

The taxpayer doctor had claimed against her income tax, the costs of attending training courses required under her employment contract and for professional development. The Revenue appealed against a decision allowing the expenses.
Held: The court set out to reconcile the apparently conflicting decision in Decadt.

Judges:

Hooper, Rimer, Pitchford LJJ

Citations:

[2010] EWCA Civ 843

Links:

Bailii

Statutes:

ncome and Corporation Taxes Act 1988

Jurisdiction:

England and Wales

Citing:

Appeal from – HM Revenue and Customs v Banerjee (No 2) ChD 19-Jun-2009
The court was asked whether the taxpayer dermatologist could deduct the expenses of attending educational courses, conferences and meetings, including associated costs of travel and accommodation.
Held: She could.
The defendant requested . .
See Also – HM Revenue and Customs v Banerjee (1) ChD 19-Jun-2009
The taxpayer sought anonymity in the reporting of the case against her.
Held: No, she could not be given anonymity.
Henderson J said: ‘In determining whether it is necessary to hold a hearing in private, or to grant anonymity to a party, . .
Cited – Blackwell (HM Inspector of Taxes) v Mills 1945
. .
Cited – Revenue and Customs Commissioners v Decadt ChD 2008
The taxpayer, a general surgical registrar, had a contract, requiring him to attend training courses and to obtain a specialist training certificate in order to qualify as a consultant surgeon. Clause 6 of his contract recorded that he had been . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 22 August 2022; Ref: scu.421109

FTTTx Income Tax and NIC – Schedule E – emoluments/earnings – tax avoidance scheme – Remuneration Trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments by employer into trust represent emoluments subject to PAYE and NIC; – (2) whether benefits (particularly loans) derived by employees from the Remuneration Trust represent emoluments subject to PAYE and NIC; – (3) ‘Ramsay’ doctrine – whether applicable – whether trust and loan arrangements artificial and fall to be disregarded; – No – Appeal allowed.

Citations:

[2012] UKFTT 692 (TC), [2013] SFTD 149, [2013] STI 492

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988

Jurisdiction:

Scotland

Cited by:

Appeal from – Revenue and Customs v Murray Group Holdings Ltd and Others UTTC 8-Jul-2014
UTTC Income Tax and NIC – emoluments/earnings – tax avoidance scheme – remuneration trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments into sub-trusts were emoluments/earnings subject . .
At FTTTx – The Advocate General for Scotland v A Decision of The Upper Tribunal, Re Assessments To Tax Made On Murray Group Holdings Ltd and Others SCS 4-Nov-2015
Second Division Inner House) The AG appealed from a finding that a tax avoidance was not a sham. TH AG brought a new argument, that the payment of the sums to the remuneration trust involved a redirection of the employee’s earnings and accordingly . .
At FTTTx – 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.

Income Tax

Updated: 18 August 2022; Ref: scu.570119

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 company’s appeal failed. The purposive approach to the interpretation of the general provisions of ICTA and ITEPA in relation to emoluments or earnings was not excluded by the provisions called in aid by the company. The payments were not shams.
A charge to income tax on employment income can arise when an arrangement gives a third party part or all of the employee’s remuneration.
‘three aspects of statutory interpretation are important in determining this appeal. First, the tax code is not a seamless garment. As a result provisions imposing specific tax charges do not necessarily militate against the existence of a more general charge to tax which may have priority over and supersede or qualify the specific charge. I return to this point towards the end of this judgment (paras 68-72 below). Secondly, it is necessary to pay close attention to the statutory wording and not be distracted by judicial glosses which have enabled the courts properly to apply the statutory words in other factual contexts. Thirdly, the courts must now adopt a purposive approach to the interpretation of the taxing provisions and identify and analyse the relevant facts accordingly.’
‘In summary, (i) income tax on emoluments or earnings is due on money paid as a reward or remuneration for the exertions of the employee; (ii) focusing on the statutory wording, neither section 131 of ICTA nor section 62(2)(a) or (c) of ITEPA, nor the other provisions of ITEPA which I have quoted (except section 62(2)(b)), provide that the employee himself or herself must receive the remuneration; (iii) in this context the references to making a relevant payment ‘to an employee’ or ‘other payee’ in the PAYE Regulations fall to be construed as payment either to the employee or to the person to whom the payment is made with the agreement or acquiescence of the employee or as arranged by the employee, for example by assignation or assignment; (iv) the specific statutory rule governing gratuities, profits and incidental benefits in section 62(2)(b) of ITEPA applies only to such benefits; (v) the cases, to which I have referred above, other than Hadlee, do not address the question of the taxability of remuneration paid to a third party; (vi) Hadlee supports the view which I have reached; and (vii) the special commissioners in Sempra Metals (and in Dextra) were presented with arguments that misapplied the gloss in Garforth and erred in adopting the gloss as a principle so as to exclude the payment of emoluments to a third party.’

Judges:

Lord Neuberger, President, Lady Hale, Deputy President, Lord Reed, Lord Carnwath, Lord Hodge

Citations:

[2017] UKSC 45, [2017] 4 All ER 654, 2017] BTC 22, 2017 GWD 21-357, [2017] STI 1610, 2017 SCLR 517, [2017] STC 1556, 2017 SLT 799, [2017] WLR(D) 450, [2017] 1 WLR 2767, UKSC 2016/0073

Links:

Bailii, WLRD, SC, SC Summary, SC Summary Video, SC 20170315am Video, SC 20170315pm Video, SC 20170316am Video, SC 20170316pm Video

Statutes:

Income and Corporation Taxes Act 1988, Income Tax (Earnings and Pensions) Act 2003 62

Jurisdiction:

Scotland

Citing:

At FTTTx – Murray Group Holdings and Others v Revenue and Customs FTTTx 29-Oct-2012
FTTTx Income Tax and NIC – Schedule E – emoluments/earnings – tax avoidance scheme – Remuneration Trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments by employer into trust represent . .
AT UTTC – Revenue and Customs v Murray Group Holdings Ltd and Others UTTC 8-Jul-2014
UTTC Income Tax and NIC – emoluments/earnings – tax avoidance scheme – remuneration trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments into sub-trusts were emoluments/earnings subject . .
Appeal from – The Advocate General for Scotland v A Decision of The Upper Tribunal, Re Assessments To Tax Made On Murray Group Holdings Ltd and Others SCS 4-Nov-2015
Second Division Inner House) The AG appealed from a finding that a tax avoidance was not a sham. TH AG brought a new argument, that the payment of the sums to the remuneration trust involved a redirection of the employee’s earnings and accordingly . .
Cited – Hochstrasser (HM Inspector of Taxes) v Mayes ; Jennings v Kinder (HM Inspector of Taxes) HL 20-Nov-1959
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 . .
Cited – Laidler v Perry HL 8-Apr-1965
HL Income Tax, Schedule E – Christmas gift voucher – Whether assessable – Income Tax Act, 1952 (15 and 16 Geo. VI and 1 Eliz. II, c. 10), Section 156; Finance Act, 1956 (4 and 5 Eliz. II, c. 54), Second Schedule, . .
Cited – Brumby (Inspector of Taxes) v Milner HL 27-Oct-1976
A company had a profit-sharing scheme for its employees. When it decided to merge with a larger company, the trustees concluded that the scheme was no longer viable. They wound it up and distributed the funds among the employees.
Held: The . .
Cited – Chinn v Hochstrasser (Inspector of Taxes) HL 11-Dec-1980
The House considered the meaning of the word ‘bounty’ in an income tax context, where it had been used by the courts: ‘My Lords, I would venture to point out that the word ‘bounty’ appears nowhere in the statute. It is a judicial gloss upon the . .
Cited – Barclays Mercantile Business Finance Ltd v Mawson (HM Inspector of Taxes) HL 25-Nov-2004
The company had paid substantial sums out in establishing a gas pipeline, and claimed those sums against its tax as capital allowances. The transaction involved a sale and leaseback arrangement which the special commissioners had found to be a . .
Cited – Tennant v Smith (Surveyor of Taxes) HL 14-Mar-1892
A Montrose bank manager had been given free accommodation in a bank house which he was required to occupy.
Held: The Inland Revenue could not charge income tax on the value of the accommodation because the employee could not convert the . .
Cited – Edwards (HM Inspector of Taxes) v Roberts CA 3-Jul-1935
The Respondent was employed by a company under a service agreement dated August, 1921, which provided, inter alia, that, in addition to an annual salary, he should have an interest in a ‘ conditional fund ‘, which was to be created by the company by . .
Cited – Abbott v Philbin (Inspector of Taxes) HL 21-Jun-1960
A company’s senior employees had been given an option to subscribe for its shares at the then current market price, the option being exercisable at any time within the next ten years. The employees were thus incentivised to increase the company’s . .
Cited – Heaton v Bell HL 1970
The Revenue sought to tax the benefit of a car loan scheme and the issue was whether the emoluments of a participating employee fell to be assessed under Schedule E gross without reference to the weekly sum deducted by the employer for providing, . .
Cited – W T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out.
Held: If the true nature . .
Cited – Barclays Mercantile Business Finance Ltd v Mawson, HM Inspector of Taxes CA 13-Dec-2002
The taxpayer entered into a sale and leaseback arrangement in respect of a gas pipeline, and sought to set off the costs as a capital allowance.
Held: The company’s appeal succeeded: ‘There is nothing in the statute to suggest that ‘up-front . .
Cited – Hadlee and Another v Commissioner of Inland Revenue PC 1-Mar-1993
(New Zealand) Section 38(2) of the Income Tax Act 1976 of New Zealand provided that income tax was payable by every person on income derived by him during the year for which tax was payable. A partner in an accountancy firm assigned a proportion of . .
Cited – Revenue and Customs v Forde and McHugh Ltd SC 26-Feb-2014
The Court heard a number of appeals concerned with the interpretation of the phrase in section 6(1) of the Social Security Contributions and Benefits Act 1992, ‘[w]here in any tax week earnings are paid to or for the benefit of an earner’ It was . .
Approved – Garforth (Inspector of Taxes) v Newsmith Stainless Ltd (Chancery Division) ChD 21-Nov-1978
In the tax year 1974/75 a taxpayer company voted to award bonuses to its two directors and controlling shareholders and credited the sums to accounts with the company from which the directors were free to draw. The directors did not draw on those . .
Incorrect – Sempra Metals Ltd v Revenue and Customs SCIT 7-Jul-2008
CORPORATION TAX – computation of profits – deductions – payments by Appellant before 2001 to employee benefit trust and after 2002 to family benefit trust – whether wholly and exclusively expended for the purposes of the Appellant’s trade – yes – . .
Cited – Aberdeen Asset Management Plc v HM Revenue and Customs SCS 23-Oct-2013
Inner House – The Court analysed the nature of the rights which a tax avoidance scheme, involving an offshore employee benefits trust and family benefit trusts and shares in Isle of Man companies, had conferred on the relevant employees. The . .
Cited – Dextra 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 – HM 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. . .
Cited – Blakiston v Cooper (Surveyor of Taxes) HL 10-Dec-1908
Whether or not a sum given by parishioners and others to the vicar at Easter, 1905, is assessable to income tax as being ‘profits accruing’ to him ‘by reason of such office.’
Sums of money collected in a parish by voluntary subscription in . .
Cited – Hartland v Diggines (HM Inspector of Taxes) HL 22-Jan-1926
Income Tax, Schedule E-Income Tax on employees’ Hilaries voluntarily paid by company – Income Tax Act, 1842 (5 and 6 Viet., c. 35), Section 146, Schedule E-Income Tax Act, 1853 (16 and 17 Viet., c. 34), Section 2, Schedule E. . .
Cited – Commissioners of Inland Revenue v The Scottish Provident Institution OHCS 3-Jul-2003
The parties arranged for the issue of cross options for the purchase of gilts, which would prove when exercised to be very tax effective when a new system of taxing such transaction was in place, and planned losses could be set off against taxable . .
Cited – Inland Revenue Commissioners v Scottish Provident Institution HL 25-Nov-2004
The parties anticipated a change in the system for taxing gains on options to buy or sell bonds and government securities. An option would be purchased before the change and exercised after the change to create losses which could be set off against . .
Approved – Sloane Robinson Investment Services Ltd v Revenue and Customs FTTTx 16-Jul-2012
FTTTx Employees’ bonus payments – whether entitlement to cash or to shares – s 18 and 686 and Part 7 of ITEPA 2003 – s 42 of Companies Act 1985 – tax avoidance scheme – purposive interpretation of statutes – . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 18 August 2022; Ref: scu.588741

FTTTx Construction Industry Scheme – penalties for late filing of returns required by paragraph 4 of the Income Tax (Construction Industry Scheme) Regulations 2005 – Reasonable excuse defence under section 118(2) TMA 1970 – No power to mitigate penalties – Preliminary Decision – proportionality issue not argued but considered by the Tribunal – Tribunal in doubt as to whether the statutory provisions satisfy the requirements of the Human Rights law principle of proportionality – Greengate Furniture Ltd. v Customs and Excise [2003] UKVAT V18280 considered – Directions made to list the appeal for further argument on the proportionality issue and on what interpretation of the statutory provisions in issue should be adopted by the Tribunal if it was to conclude that the statutory provisions (or any of them) did not satisfy the Human Rights law principle of proportionality.

Citations:

[2009] UKFTT 341 (TC)

Links:

Bailii

Income Tax

Updated: 17 August 2022; Ref: scu.409171

INCOME TAX – back duty investigation and assessments – whether there were undeclared cash sales – yes – whether there was undeclared overseas investment income or gains – yes – whether the Hansard procedure changed the usual burden and standard of proof – no – whether there had been a sufficient discovery – yes – appeals dismissed – sections 29 and 36 TMA 1970

Citations:

[2009] UKFTT 275 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.409070

ENTERPRISE Investments Scheme – Eligibility for relief – Individuals qualifying for relief – Whether individual connected with issuing company – Whether individual possessed more than 30% of the loan capital and issued share capital of the issuing company – No – Appeal allowed – ICTA 1988 s.291B

Citations:

[2009] UKFTT 336 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.409129

Construction industry scheme – CIS – penalties for failure to make online returns on time – reasonable excuse – s 118(2) TMA

Citations:

[2009] UKFTT 289 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.409006

INCOME TAX – Schedule E – benefits in kind – employee shareholdings – disposal of shares by employee to employer for a consideration which exceeded market value – whether shares acquired in pursuance of a right or opportunity available to employee by reason of his employment – no – whether on the disposal of the shares the payment of a consideration which exceeded market value constituted the provision of a benefit provided by reason of his employment – yes – appeal dismissed – ICTA 1988 Ss 162(1)(b), 162(6)(b) and 154

Citations:

[2009] UKFTT 210 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.409036

FTTTX Income tax – Sch D – computation of profits – section 42 FA 1998 – generally accepted accounting practice – whether accounts prepared in accordance with accounting standards
Income tax-section 29 TMA 1970 – discovery – whether negligent conduct if accounts not prepared in accordance with generally accepted accounting practice

Citations:

[2010} UKFTT 92 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408934

FTTTx Income tax – residence – determination of ordinary residence – whether taxpayer ordinarily resident for the first three full tax years after arrival in the UK – on facts, yes – appeal dismissed

Citations:

[2010] UKFTT 53 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408938

Sub-contractors in the construction industry

Citations:

[2010] UKFTT 89 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408932

INCOME TAX – adjustments to self assessment – discovery assessment – suppression of takings – fairness of estimates by HMRC – appeal dismissed

Citations:

[2010] UKFTT 41 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408902

Self assessment -Appeal against daily penalties charged for apparent non submission of returns – whether reasonable excuse for non receipt of returns – whether penalty excessive and whether penalty proportionate to tax liability – Taxes Management Act 1970 Section 100B (2)(iii)

Citations:

[2010] UKFTT 80 (TC)

Links:

Bailii

Statutes:

Taxes Management Act 1970

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408885

FTTTx INCOME TAX – late submission of paper partnership return – reliance on misleading advice on HMRC website – whether reasonable excuse – yes

Citations:

[2010] UKFTT 78 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408871

FTTTx Fixed penalties: Surcharge for late payment of income tax. Reasonable excuse.

Citations:

[2010] UKFTT 81 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408877

Whether or not a sum given by parishioners and others to the vicar at Easter, 1905, is assessable to income tax as being ‘profits accruing’ to him ‘by reason of such office.’
Sums of money collected in a parish by voluntary subscription in order to augment the stipend of a clergyman, when there is a continuity of annual payments to him from such sources apart from any special occasion, are profits accruing to him by reason of is office, and are therefore assessable to income tax
The fact that bonuses were voluntary on the part of the employer is irrelevant so long as the sum of money is given in respect of the employee’s work as an employee

Judges:

Lord Chancellor (Loreburn), Lords Ashbourne, Robertson, and Collins

Citations:

[1908] UKHL 1, (1909) STC 347, [1909] AC 104, [1908] UKHL TC – 5 – 347, [1908] UKHL 1023, 46 SLR 1023

Links:

Bailii, Bailii, Bailii

Jurisdiction:

England and Wales

Cited by:

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.

Income Tax

Updated: 16 August 2022; Ref: scu.265969

First year’s trading relief for losses was ascribable to the year in which the occured not the basis period.

Citations:

Times 25-Oct-1996

Statutes:

Income and Corporation Taxes Act 1988 38(1)

Jurisdiction:

England and Wales

Income Tax

Updated: 14 August 2022; Ref: scu.80763

A taxpayer may challenge an assessment if it was raised more than 12 months after the relevant year.

Citations:

Times 13-Jul-1993

Statutes:

Income and Corporation Taxes Act 1970 206

Jurisdiction:

England and Wales

Citing:

See Also – Walters (Inspector of Taxes) v Tickner ChD 6-May-1992
A taxpayer is entitled to have his liability decided by the law and not by Inland Revenue Practice. . .

Cited by:

Appeal from – Walters v Tickner (Inspector of Taxes) CA 9-Aug-1993
An appeal out of time from an assessment was allowed where there was an unqualified exemption. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 06 August 2022; Ref: scu.90270

A skilled vision mixer who was working for several companies was self employed.
Mummery J said: ‘In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.’

Judges:

Mummery J

Citations:

Gazette 08-Jul-1992

Jurisdiction:

England and Wales

Citing:

Appealed to – Hall (Inspector of Taxes) v Lorimer CA 5-Nov-1993
A freelance vision mixer remained self-employed despite having had a series of short term contracts. . .

Cited by:

Appeal from – Hall (Inspector of Taxes) v Lorimer CA 5-Nov-1993
A freelance vision mixer remained self-employed despite having had a series of short term contracts. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 05 August 2022; Ref: scu.81162

An employee changing cars during the tax year has to make separate computations of benefit for each car.

Citations:

Times 14-May-1997, Gazette 21-May-1997

Statutes:

Income and Corporation Taxes Act 1988 157 sch 6

Jurisdiction:

England and Wales

Income Tax

Updated: 05 August 2022; Ref: scu.81328

Citations:

[2009] EWCA Civ 1082

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 04 August 2022; Ref: scu.377306

Judges:

Proudman J

Citations:

[2009] EWHC 2443 (Ch), [2010] STC 1, [2009] STI 2747, [2009] BTC 617

Links:

Bailii

Statutes:

Taxes Management Act 1970

Jurisdiction:

England and Wales

Income Tax

Updated: 04 August 2022; Ref: scu.375959

FTTTxxx Income tax – taxation of earnings – emoluments – whether payment a payment in lieu of notice – whether breach of contract – no – applicable notice period under contract of employment – three months – appeal dismissed

Citations:

[2009] UKFTT 140 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373674

FTTTx Seafarers’ earnings; ship; offshore installation; whether vessels offshore installations; Mineral Workings (Offshore Installations) Act 1971 sections 1 and 12; Income and Corporation Taxes Act 1988 section 192A, 837C; Income Tax (Earnings and Pensions) Act 2003 sections 378-385; Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995, regulation 3(1)(a)(c)and(d) and (2)(d)and(e)

Citations:

[2009] UKFTT 142 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373694

FTTTx Appeal; assessment; onus

Citations:

[2009] UKFTT 55 (TC), [2009] UKFT 00034 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373619

FTTTx INCOME TAX – payments made by firm to partners who were asked to withdraw from the partnership – whether payments chargeable to income tax as profits – yes – or whether payments were expenditure which should have been deducted by the firm in computing its profits – no – appeal dismissed – ICTA 1988 ss 18 and 74

Citations:

[2009] UKFTT 78 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373629

FTTTx Income tax – penalty for late payment of PAYE – whether reasonable excuse – held, no – appeal dismissed and penalty confirmed

Citations:

[2014] UKFTT 99 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.521707

FTTTx INCOME TAX – compensation payment – connected with termination of employment? – no – appeal allowed.

Citations:

[2009] UKFTT 71 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 30 July 2022; Ref: scu.373602

ECJ Freedom to provide services – Free movement of capital – Wealth tax – Income tax – Savings deposited in a Member State other than the Member State of residence No declaration Recovery period Extension of the recovery period in the case of assets held outside the Member State of residence Directive 77/799/EEC – Mutual assistance of the competent authorities of the Member States in the field of direct and indirect taxation Banking secrecy.

Citations:

[2009] EUECJ C-155/08

Links:

Bailii

Statutes:

Directive 77/799/EEC

Jurisdiction:

European

Income Tax

Updated: 28 July 2022; Ref: scu.347054

ECJ Freedom to provide services – Free movement of capital – Wealth tax – Income tax – Savings deposited in a Member State other than the Member State of residence No declaration Recovery period Extension of the recovery period in the case of assets held outside the Member State of residence Directive 77/799/EEC – Mutual assistance of the competent authorities of the Member States in the field of direct and indirect taxation Banking secrecy.

Citations:

C-157/08, [2009] EUECJ C-157/08

Links:

Bailii

Jurisdiction:

European

Income Tax

Updated: 28 July 2022; Ref: scu.347055

The society challenged the validity of transitional provisions in the 1986 regulations on the ground that they were ultra vires. The House considered the specific presumption against double taxation, and also a power in general terms to make regulations for the taxation of building society interest. The Society complained that the effect of the regulations was to make it subject to tax in respect of payments of interest which had already been taxed in a previous year and that the statute should not be construed as permitting such double taxation.
Held: The background to the enactment of the statute made it clear that this was exactly what Parliament had in mind. The suggested inhibition against cumulative taxation lies not in the words which Parliament has chosen to use but in certain well-established presumptions or principles – a presumption against double taxation, a presumption that income tax, being an annual tax, is payable only on income of a particular year and so on. But these are only presumptions. They are clearly rebuttable if sufficiently clear express words are used. But they can also be rebutted, as it seems to me, by circumstances surrounding the enactment of the particular legislation which lead to an inevitable inference that Parliament intended, in using the words that it did, that these presumptions or principles should not apply. A party who had made a payment to the Revenue pursuant to an unlawful demand was entitled as of right to a restitutionary remedy, regardless of whether in making the payment the payer was acting under any mistake of law.

Judges:

Lord Oliver of Aylmerton, Lord Goff, Lord Browne-Wilkinson

Citations:

[1990] 1 WLR 1400, [1990] UKHL TC – 63 – 589

Links:

Bailii

Statutes:

Income Tax (Building Societies) Regulations 1986

Jurisdiction:

England and Wales

Citing:

See Also – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .

Cited by:

Cited – Regina v Central Valuation Officer and another ex parte Edison First Power Limited HL 10-Apr-2003
Powergen sold a property to Edison. Powergen had paid rates under a separate statutory rating regime, and paid an additional thirteen million pounds under an apportionment. Edison later complained that in being rated itself, the authorities had . .
See Also – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Smithkline Beecham Plc Glaxosmithkline UK Ltd and Another v Apotex Europe Ltd and others (No 2) CA 23-May-2006
The parties to the action had given cross undertakings to support the grant of an interim injunction. A third party subsequently applied to be joined, and now sought to take advantage of the cross undertakings to claim the losses incurred through . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 26 July 2022; Ref: scu.182560

Capital assessments issued by Inland Revenue are sufficient evidence of debt until answer by taxpayer and doubts raised even though not accepted.

Citations:

Times 10-Feb-1998

Statutes:

Taxes Management Act 1970 36

Jurisdiction:

England and Wales

Income Tax

Updated: 24 July 2022; Ref: scu.81554

The company appealed against a determination by the defendants that when an employee had sold his shares, it had done so at a price over the market value, and in doing so, incurred a charge to income tax.
Held: The appeal failed.

Citations:

[2009] ScotCS CSIH – 11, [2009] STC 889

Links:

Bailii

Statutes:

Income Tax (Earnings and Pensions) Act 2003 446X(b)

Jurisdiction:

Scotland

Cited by:

At SCS – Grays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 23 July 2022; Ref: scu.291793

The withdrawal of a scheme approval after non-disclosure by the taxpayer was not an abuse of power by the Commissioners.

Citations:

Gazette 26-Jan-1994, Times 10-Nov-1993

Jurisdiction:

England and Wales

Citing:

Appeal from – Regina v Inland Revenue Commissioners Ex Parte Matrix Securities Ltd QBD 22-Oct-1993
A tax clearance was properly withdrawn because of non-disclosure. There was no abuse by the Revenue. . .

Cited by:

Appeal from – Regina v Inland Revenue Commissioners Ex Parte Matrix Securities Ltd HL 14-Mar-1994
The applicant had obtained what it thought to be clearance from the Revenue for a complex scheme, whose effectiveness depended on whether investors would qualify for capital allowances. The Inspector initially gave a favourable assurance, but that . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 23 July 2022; Ref: scu.86941

Citations:

[2009] EWHC 60 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 22 July 2022; Ref: scu.280056

Appeal by the subject from the Special Commissioners against assessments to income tax under Case I of Schedule D; and the question of law on which we have so far heard argument is ‘whether there was evidence on which we were entitled to find that the sales effected by the company were made in the course of a trade carried on by it.’ The rival contention presented by the appellants was that the company had merely realised fixed capital assets and was therefore immune from taxation on the ‘profits.’

Citations:

[1954] ScotCS CSIH – 3, (1954) 33 ATC 151, 47 R and IT 127, 1954 SLT 97, 1954 SC 266, 35 TC 196

Links:

Bailii

Jurisdiction:

Scotland

Income Tax

Updated: 22 July 2022; Ref: scu.279428

Citations:

[1957] UKHL TC – 37 – 111, [1957] 1 WLR 464, 37 TC 111

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 21 July 2022; Ref: scu.560134

SCIT Income tax – limited liability partnership – investment in films – expenditure on the acquisition of the master negative of a film – whether deduction under s 42 F(No 2)A 1992 precluded by s 101 FA 2002 – no – date of commencement of partnership’s business and basis period applicable – s 40B(3)(b)(ii) F(No 2)A 1992 – whether any part of acquisition expenditure on films to be disallowed – no – whether film consultancy fees incurred deductible – yes.

Citations:

[2008] UKSPC SPC00696

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 19 July 2022; Ref: scu.273101

Bonus taxable in year earned, not when actually paid – no power of choice.

Citations:

Ind Summary 22-May-1995

Jurisdiction:

England and Wales

Income Tax

Updated: 19 July 2022; Ref: scu.81041

SCIT SPECIAL COMMISSIONERS — Costs — Regulation 21 — Behaviour wholly unreasonable? Not wholly unreasonable — Application refused.

Citations:

[2008] UKSPC SPC00686

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 17 July 2022; Ref: scu.269809

SCIT Profit, Notional Schedule D, Case 1 Computation, Life assurance taxation, Basic life assurance and general annuity business, Policy holder’s share.

Citations:

[2007] UKSPC SPC00658

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 15 July 2022; Ref: scu.267778

Citations:

[2007] UKSPC SPC00659

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 15 July 2022; Ref: scu.267774

Citations:

[2007] UKSPC SPC00658

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 15 July 2022; Ref: scu.267779

Income Tax/Corporation Tax : Penalty

Citations:

[2017] UKFTT 584 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 14 July 2022; Ref: scu.592626

Income Tax/Corporation Tax : Penalty

Citations:

[2017] UKFTT 619 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 14 July 2022; Ref: scu.592650

Income Tax/Corporation Tax : Penalty

Citations:

[2017] UKFTT 581 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 14 July 2022; Ref: scu.592623

Judges:

Henderson J

Citations:

[2007] EWHC 163 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 13 July 2022; Ref: scu.248389

Judges:

Henry, Millett LJJ

Citations:

[1994] EWCA Civ 9, (1994) 66 TC 743, [1994] STC 689, [1994] 3 All ER 731, [1994] 27 LS Gaz R 37

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 12 July 2022; Ref: scu.263230

Surtax – Profits Tax – Company under control of not more than five persons-No estate or trading income-Income receipts less than deduction for Profits Tax in computing actual income from all sources – Whether Profits Tax payable ‘ – Whether Surtax direction mandatory so as to found Profits Tax exemption – Finance Act, 1947 (10 cS; 11 Geo. VI, c. 35), Section 31 (3) ; Income Tax Act, 1952 (15 and 16 Geo. VI and 1 Eliz. II, c. 10), Sections 245 and 262 ; Finance Act, 1952 (15 and 16 Geo. VI and 1 Eliz. II. c. 33), Section 68.

Citations:

[1958] UKHL TC – 37 – 677, 37 TC 677

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 12 July 2022; Ref: scu.559979

FTTTx PAYE – late submission of Employer’s Annual Return – Whether there was reasonable excuse for late submission of return – No.

Citations:

[2013] UKFTT 749 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 12 July 2022; Ref: scu.519649

IR 35 – business and data analysis contractor working on a series of three-month contracts for a five-year computer project -whether would be an employee if engaged directly by the client – yes – appeal dismissed

Citations:

[2007] UKSPC SPC00618

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 11 July 2022; Ref: scu.259272

SCIT INCOME TAX – s93 TMA Daily penalty – Was amount appropriate? Yes – appeal dismissed

Citations:

[2007] UKSPC SPC00590

Links:

Bailii

Income Tax

Updated: 10 July 2022; Ref: scu.251316

Europa Freedom of establishment – Article 52 of the EC Treaty (now, after amendment, Article 43 EC) – Non-resident taxpayer carrying out a self-employed activity – Setting of minimum tax bases applicable only to non-resident taxpayers – Justified by requirements of general interest – Effectiveness of fiscal supervision – Not justified.

Citations:

C-383/05, [2007] EUECJ C-383/05, [2006] EUECJ C-383/05

Links:

Bailii, Bailii

Jurisdiction:

European

Income Tax

Updated: 10 July 2022; Ref: scu.251135

SCIT Employment income – car fuel for private use reimbursed to the employer retrospectively – whether taxable because not paid in the relevant year (s 158(6) Taxes Act 1988 and s 151 ITEPA 2003) – yes – appeal dismissed

Citations:

[2006] UKSPC SPC00562

Links:

Bailii

Income Tax

Updated: 10 July 2022; Ref: scu.249660

Judges:

Burton J

Citations:

[2007] EWHC 167 (Admin)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 09 July 2022; Ref: scu.248932

Judges:

Pumfrey J

Citations:

[2006] EWHC 2820 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 08 July 2022; Ref: scu.245994

Citations:

[2006] EWHC 2491 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 08 July 2022; Ref: scu.245415

SCIT NOTICE FOR PRODUCTION – whether the Respondents could reasonably require the provision of specified documents and information for the purposes of determining whether the returns were inaccurate or incomplete – the documents required included the private accounts of the Appellant which had been used to bank rental payments and the proceeds of share transactions – significant gaps in the Appellant’s tax returns despite the additional information discovered by the Respondents and confirmed by the Appellants – satisfied that the Inspector reasonably required the specified documents to complete the enquiries into Appellant’s tax returns – the requirement was limited to two years set of accounts – the requirement did not contravene Article 8 of the Human Rights Convention – Appeal Dismissed – TMA 1970 s 19A.

Citations:

[2006] UKSPC SPC00554

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 07 July 2022; Ref: scu.244607

SCIT SUB-CONTRACTOR’S CERTIFICATE – Revenue refusing on account of the failure to comply with two stated conditions – whether on being satisfied about those conditions the Revenue can raise the non-compliance with a third condition which is particularised on the day before the hearing – no (except when arising out of new facts put forward by the Appellant in showing compliance with the first two conditions)
PRACTICE – sub-contractor’s certificate – condition relating to compliance with obligations under Tax Acts – whether to strike out the Revenue’s investigations on the basis that the Appellant had no obligations – no

Citations:

[2006] UKSPC SPC00553

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 07 July 2022; Ref: scu.243255

Citations:

[2006] UKSPC SPC00543

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 07 July 2022; Ref: scu.242834

INCOME TAX/ CORPORATION TAX – assessment/self-assessment – repair of self-assessment tax return – whether return complete – yes: reference to liability made in box relating to ‘Additional information’ – whether amendment to return possible where enquiry opened and closed on incorrect premise – yes: return already included information to make the repair – appeal dismissed
INCOME TAX/ CORPORATION TAX – pension schemes – privatisation of Scottish Bus Group Ltd – winding up of pension schemes – nature of ‘ex gratia’ payments made by government to those previously entitled to pension benefits – whether individual taxable on ‘ex gratia’ benefit so received pursuant to ICTA 1988, s.596A(2) – yes: benefit provided under ‘retirements benefit scheme’ – appeal dismissed

Citations:

[2006] UKSPC SPC00538

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 06 July 2022; Ref: scu.241889

Income Tax/Corporation Tax : Profits

Citations:

[2018] UKFTT 25 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 04 July 2022; Ref: scu.604354

Income Tax/Corporation Tax : Appeal

Citations:

[2017] UKFTT 848 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 04 July 2022; Ref: scu.600948

Income Tax/Corporation Tax : Penalty

Citations:

[2015] UKFTT 646 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 04 July 2022; Ref: scu.557169

DIRECTION sought that unsubstantiated allegations of fact contained in the UK’s Written Observations to the European Court of Justice will have to be made good and that the matter cannot proceed on the basis of any of those allegations until made good – whether jurisdiction to make – yes, but no Direction made – the Tribunal’s understanding of the main differences between the parties over the facts summarised in case the ECJ finds it useful

Citations:

[2005] UKSPC SPC00512

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 04 July 2022; Ref: scu.237623

Husband and wife had been shareholders in a company, the wife being recorded as company secretary. The company paid dividenceds to both. The husband appealed a decision that the payment to his wife was by way of a settlement and was taxable in his hands.
Held: The appeal succeeded. ‘there can be no doubt but that the arrangement was or included the acquisition by Mrs Jones of her share in the Company. Equally there can be no doubt that that acquisition on its own was for full value in the context of a joint business venture to which both parties made substantial and valuable contributions’ The court distinguished all the earlier cases. ‘In the absence of any service agreement between the Company and Mr Jones I am unable to accept that the payment of modest salaries to Mr Jones was any part of the arrangement. Similarly the declaration of the dividends was not arranged in advance; it was dependent on the trading fortunes of the Company.’ There was no settlement as defined in this case.

Judges:

Lord Justice Keene Lord Justice Carnwath The Chancellor of the High Court

Citations:

[2005] EWCA Civ 1553, Times 03-Jan-2006, [2006] 1 WLR 1123

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 660G(1)

Jurisdiction:

England and Wales

Citing:

Cited – Inland Revenue Commisioners v Leiner 1964
An interest free loan was made to an associated company from the taxpayer’s mother which was then replaced by another interest free loan from the taxpayer. The circle of loans included an interest bearing loan to the taxpayer from the trustees of a . .
Cited – Bulmer v Inland Revenue Commissioners 1967
Shareholders fearing a takeover sold their shares to another company’s subsidiary at below market value, the balance of value outstanding on an interest free loan. A commercial loan was used to buy further shares. When the loan was fully repaid the . .
Cited – Inland Revenue Commissioners v Plummer HL 1-Nov-1979
Although transactions were integrated as part of a preconceived scheme which was commercially marketed and that had no other conceivable purpose than that of saving surtax, the construction of the statute compelled the acceptance of a fiscal result . .
Cited – Chinn v Hochstrasser (Inspector of Taxes) HL 11-Dec-1980
The House considered the meaning of the word ‘bounty’ in an income tax context, where it had been used by the courts: ‘My Lords, I would venture to point out that the word ‘bounty’ appears nowhere in the statute. It is a judicial gloss upon the . .
Cited – Copeman v Coleman 1939
A company had been formed to take over the taxpayer’s business. He held the shares equally with his wife. Later the company created a class of preference shares of andpound;200 each carrying a fixed preferential dividend, the right to vote if such . .
Cited – Commissioners of Inland Revenue v Payne CA 1940
The taxpayer covenanted to pay an annual sum to a company controlled by him for his life or until it was wound up. He claimed to deduct the amount of the covenant in the computation of his total income for surtax purposes. The Revenue refused his . .
Cited – Crossland v Hawkins CA 1961
The taxpayer, a well known film actor, agreed to work through a company for three years being paid andpound;50 per week. The shares were transferred to his wife and accountant. His father in law set up a andpound;100 settlement for the benefit of . .
Cited – Mills (Hayley) v Commissioners of Inland Revenue HL 12-Feb-1974
Surtax – Settlement – Arrangement – Settlor – Fees for actress’s services paid to company but enuring for her benefit – Actress aged 14 when arrangements made – Settlement with more than one settlor – From whom income originates – Income Tax Act . .
Cited – Butler v Wildin 1988
Two brothers acquired a company and were the sole directors. 19 shares each were acquired by the children with their own money. Two later born children also acquired 19 shares therein with their own money from their respective fathers and others, . .
Cited – Butler v Wildin 1988
Two brothers acquired a company and were the sole directors. 19 shares each were acquired by the children with their own money. Two later born children also acquired 19 shares therein with their own money from their respective fathers and others, . .
Cited – Young v Pearce 1996
The company created a special class of preference shares and allotted them to the wives of the two shareholders and directors. When substantial preference dividends were paid to the wives, the husbands were assessed to tax on them. They conceded . .
Appeal from – Jones v Garnett (Inspector of Taxes) ChD 28-Apr-2005
The taxpayer worked as an information technology specialist. His earnings were channelled through a limited company. The company paid on part of its income to his wife, with the result that the total tax paid was reduced. The inspector sought to tax . .

Cited by:

Appeal From – Jones v Garnett (Her Majesty’s Inspector of Taxes) HL 25-Jul-2007
The husband and wife had each owned a share in a company which sold the services of the husband. The Revenue claimed that the payment of dividends to the wife was a settlement.
Held: The Revenue failed. The share had been transferred to the . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 04 July 2022; Ref: scu.236378