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In an appeal relating to the tax treatment of a compensation payment the appellant argued that the ‘termination payment’ of £75 107.61 paid by the Post Office Ltd should be treated as capital payment.
The issues in the case sprung from the closure of the appellant’s post office branch in June 2004 as part of a Network Reinvention Programme.
HMRC said that subject to a £30 000 exemption under ITEPA 2003 s 403 the payment did not qualify as claimed by the appellant as ‘a capital payment to his wife and himself in equal shares in respect of their disposal of the goodwill their partnership business’ and instead was taxable as employment income (s 401).
The tribunal found that when the appellant agreed to close his post office branch he lost his position as a sub-postmaster and...
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