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Spotlight 59 updates HMRC’s position on avoidance schemes that attempt to treat payments made by an employer to an employee on the maturity of a contract for difference as a capital gain rather than as employment income. The payments are then taxed at the capital gains tax rates rather than at income tax rates and subject to National Insurance.
The department stated in Spotlight 28 that it considered such schemes do not work. It now reiterates that in light of a challenge by users of a growth securities ownership plan (GSOP) which the First-tier Tribunal in Jones Bros Ruthin and Britannia Hotels (TC8378) dismissed. The tribunal agreed with HMRC that payments made under the scheme were taxable as employment income and dismissed both appeals.
