Deferred gift

We have recently commenced acting for a client who is both domiciled and resident in the UK but who had worked for the UK subsidiary of a private American company for many years.

Shortly before the private American company was taken over by a US quoted company in October 2002 the three US stockholders each made a partial gift of their stock to our client with the proviso that he should hold the stock for two years. To ensure this the stock was placed into a form of US trust known as a 'rabbi' trust. Our client was entitled to any dividends paid on the stock but none arose in the two-year period.

In September 2004 on the second anniversary of the gift the stock in the quoted company was transferred to our client less a deduction for income tax and National Insurance...