Mr Barrie Macey v Commissioners for Her Majesty's Revenue and Customs
Decision date: 2 November 2010
Neutral citation: [2010] UKFTT 533 (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
This case concerned whether a one‑off award of Morgan Stanley restricted stock units (RSUs), granted when the appellant left Ernst & Young and joined Morgan Stanley, was taxable as earnings from employment or was compensation for loss of a non‑employment asset. The Tribunal found the RSUs were part of the employment remuneration package, conditional on continued service and intended as an inducement to enter and perform employment. The RSUs were therefore earnings from employment and taxable on conversion; the appellant’s appeal was dismissed.
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: high
An award made by a prospective employer as part of an offer and conditional on continued service (vesting tied to employment) is properly characterised as an emolument from employment rather than compensation for loss of a non‑employment asset; the conditional, forfeitable nature and use of the forfeited shares as a bargaining tool were strong indicia of remuneration.
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 suggested that a taxpayer’s later claims about having intended to take the job regardless of compensation should be treated with caution if contemporaneous documentary evidence contradicts them, and noted that tax paid on a prior deemed disposal of forfeited shares does not necessarily determine the tax character of a subsequent employer award.