Wales (Inspector of Taxes) v Tilley: HL 11 Feb 1943

The taxpayer was managing director of a company. The Revenue sought to tax him on two sums of andpound;20,000 paid by to him by the company. The sums were paid in part as the price of compounding a pension, and in part in consideration of the reduction of the Appellant’s annual salary.
Held: A pension is not an emolument, and a lump sum paid to commute a pension is in the nature of a capital payment which is substituted for a series of recurrent and periodic sums which partake of the nature of income, but the same view should not be taken of an arrangement made between an employer and his servant under which, instead of the whole or part of a periodic salary, a single amount is paid and received in respect of the employment.

Judges:

Lord Chancellor, Lord Atkin, Lord Thankerton Lord Russell of Killowen Lord Porter

Citations:

[1943] UKHL 1, (1945) 25 TC 136

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

CitedBarclays Bank Plc and Another v HM Revenue and Customs CA 11-May-2007
Retired bank employees had previously received free tax advice. When the service was withdrawn, the bank made a payment. The Revenue said that this payment was chargeable to income tax.
Held: The bank’s appeal failed. The payment was made ‘in . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 09 July 2022; Ref: scu.248501