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Philip Manduca v HMRC

In Philip Manduca v HMRC [2015] UKUT 0262 (26 May 2015) the UT found that a payment received on the change of management of a hedge fund was a payment for services taxable as income.

The appeal related to the tax treatment of a payment of £310 000 received by Mr Manduca from his ex-employer Dexia under the terms of an out of court settlement which related to the non-payment of a bonus. Mr Manduca contended that the payment was subject to capital gains tax whereas HMRC considered that it was assessable to income tax under Schedule D Case VI (ICTA 1988 s 18 Sch D).

It was accepted that the settlement was taxable in the same way as the bonus would have been if it had been paid under the terms of the bonus agreement.

The UT found that the bonus would have been remuneration...

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