News - tax cases

Shares equal cash

A company set up a funded unapproved retirement benefits scheme for its executives in September 1996. The appellant became a member of the scheme and the company made a contribution comprising £5 000 cash and shares valued at £145 051 on his behalf for 1995-96. The appellant's tax return reported the contribution but did not include it as part of his income liable to tax. HMRC subsequently amended his self assessment to increase his taxable Schedule E income by £145 051 on the basis that the transfers of shares to the scheme constituted a monetary contribution and was income assessable under Schedule E under TA 1988 s 595(1). The appellant appealed.
The issue was whether the transfer of shares could be considered to be a monetary contribution.
The Special Commissioners noted that in s 565(1) the words relating to payment e.g....