G Forsyth (TC4029)
The taxpayer retired from Nestlé in 1995 but remained a member of the company’s healthcare scheme.
The business wrote to the taxpayer in October 2009, inviting him to leave the scheme in return for a one-off payment of £29,783. The taxpayer agreed; the payment was made to him after deduction of tax in January 2010.
He included the sum under “any other information” in his 2009/10 tax return, claiming it was compensation for the surrender of rights to medical care that should be treated as a payment of capital.
HMRC disagreed and assessed the sum to income tax. The taxpayer appealed.
The First-tier Tribunal said the payment was in connection with his past service with Nestlé, meaning the sum fell within ITEPA 2003, s 393B and was a “relevant benefit” provided under an employer-financed retirement benefits scheme. As such, it was liable to income tax under s 394.
The taxpayer’s appeal was dismissed.
