The substantive issue in this appeal – Hemingway v HMRC [2023] UKFTT 749 (TC) – was summarised as follows at the start of the case summary:
“whether a payment received by the Appellant shortly after his employer was the subject of a merger is taxable in full as being a payment in connection with the loss of the Appellant’s share options or, alternatively, in respect of the loss of his employment rights and so attracting relief on the first £30,000 paid to him.”
On the main point, the FTT agreed with HMRC that ITEPA 2003, s. 476 took priority over s. 401 by virtue of s. 401(3):
“The Appellant argued that the loss to which the compensation related was the loss of the right to participate in the 1988 plan and therefore his employment rights were varied. We accept that the point is arguable but we agree with HMRC that the Payment was intended and was most closely connected to the loss of the Appellant’s share options. Indeed, in cross examination the Appellant accepted that he would not have had the Payment had he not held the options. The fact that Broadcom made the payment later and potentially of a different amount than that originally represented as payable does not alter the position.”
The taxpayer also argued that the relevant closure notice was invalid “because the enquiry into an earlier voluntary tax return submitted by the Appellant was validated retrospectively” by TMA 1970, s. 12D. HMRC did not accept that argument, because of the effect of FA 2019, s. 87(4)). The FTT rejected many of HMRC’s other arguments, but also rejected the taxpayer’s s. 12D arguments on various grounds.
The FTT confirmed its earlier decision that no costs award should be made against the taxpayer.
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08929.html
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