Source: All England Reporter
Publisher Citation: [2010] All ER (D) 31 (Feb)
Neutral Citation: [2010] UKSC 4
Court: Supreme Court
Judge:

Lord Hope (Deputy President), Lord Rodger, Lord Walker, Lord Brown and Lord Kerr SCJJ
Representation Michael Sherry and Alun James (instructed by Biggart Baillie LLP) for the taxpayer.
  David Johnston QC and Iain Artis (instructed by the Solicitor for the Revenue and Customs) for the Revenue.
Judgment Dates: 3 February 2010

Catchwords

Income tax - Employment related securities - Income and exemptions relating to securities - Taxpayer company's employee acquiring employment-related securities in connection with employment - Third party company purchasing entire share capital of taxpayer - Employee disposing of securities for more than market value - Employee paid amount disproportionately greater than those received by other shareholders or his percentage of equity share - Whether enhanced payment taxable as employment income or chargeable gain - Appropriate calculation of market value - ss 446X(b), 446Y.

The Case

Income tax Employment related securities. In a case relating to the regime governing the disposal of employment-related securities for more than market value, the Supreme Court ruled that attention had to be focused on the asset that required to be valued to determine their market value for the purposes of ss446X and446Y of the . What had to be considered was what the hypothetical purchaser would pay to acquire those rights at the relevant date. In the instant case, the valuation of shares did not have to take account of the actual sale of the shares at a special price enhanced for reason related to the vendor's special position as managing director at the taxpayer company.

Practice Areas

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