HMRC v Vermilion Holdings Ltd

In HMRC v Vermilion Holdings Ltd [2023] UKSC 37 (25 October 2023) the Supreme Court (SC) allowed HMRC’s appeal holding that a share option was an employment-related share option because it was granted by the taxpayer’s employer. 

In 2006 Vermilion Ltd (V Ltd) granted a share option to a consultant company in payment for corporate advisory services that it had provided to it. N was an owner and director of the consultant company and after V Ltd subsequently came into financial difficulty N was appointed as a director. As part of V Ltd's restructuring it also became necessary to amend the terms of the 2006 option which was therefore replaced with a new option in 2007 on amended terms which included that N would be the option-holder (instead of his consultant company). HMRC considered...