In B Macey v HMRC (TC00787 – 18 November) an accountant (M) agreed to take up employment with a merchant bank in 2001. He received some ‘restricted stock units’ which he subsequently (in 2006/07) converted into common stock. HMRC issued an amendment to his 2006/07 tax return to charge income tax on the value of the stock. M appealed. The First-Tier Tribunal dismissed his appeal applying the principles laid down by the HL in Shilton v Wilmshurst [1991] STC 88 and holding that the restricted stock was an inducement to enter into a contract of employment which was taxable on its conversion as an emolument of that employment within ITEPA 2003 s 62(2).
Why it matters: The First-Tier Tribunal upheld HMRC’s interpretation of the well-known case of Shilton v Wilmshurst. The payment here was an inducement to the accountant to enter into a contract...
