Nicky Howard-Ravenspine v The Commissioners for HMRC
Decision date: 2 June 2023
Neutral citation: [2023] UKFTT 471 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
The tribunal considered whether part of a £93,357 2016 severance payment to Ms Howard‑Ravenspine was exempt from the 2016/17 High Income Child Benefit Charge under the statutory disability exemption. It held that £83,907 of the payment was paid on account of incapacity and therefore fell within the disability exemption, rejecting HMRC’s all‑or‑nothing interpretation of the relevant test. The exempted element reduced the appellant’s adjusted net income below the HICBC threshold and the discovery assessment was discharged.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
Where reliable evidence shows a distinct element of a composite termination payment was made on account of disability, that element may be apportioned and treated as exempt under the disability exemption; the second Horner test requires the payer’s motive to include payment on account of disability but does not demand the whole payment be solely for disability.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The tribunal noted HMRC’s guidance (EIM 13637) contemplates apportionment in termination agreements addressing multiple issues, and emphasised the importance of correctly handling evidence and legal tests; HMRC’s presenting officer subsequently conceded the initial position was incorrect and apologised.