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M Phair v HMRC

In M Phair v HMRC (TC02752 – 21 June) a company (B) had allocated one of its employees (P) units in an option scheme known as a ‘capital accumulation plan’. In 2004 P left his employment but retained his rights under the scheme. B subsequently issued shares to P under the scheme. P submitted a self-assessment return claiming a refund of the tax that B had deducted under PAYE. HMRC began an enquiry rejected the repayment claim and issued a closure notice requiring P to pay further tax of £813 133. The First-tier Tribunal dismissed P’s appeal. Judge McKenna held that the ‘capital accumulation plan’ units were employment-related securities options within ITEPA 2003 s 471. The distribution of the shares to P was a chargeable event within ITEPA 2003 s 477(3).

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Why it matters: The First-tier Tribunal upheld HMRC’s contention...

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