Albon v Commissioners of Inland Revenue
| Jurisdiction | Scotland |
| Judgment Date | 31 July 1998 |
| Docket Number | No 89 |
| Date | 31 July 1998 |
| Court | Court of Session (Inner House - Extra Division) |
EXTRA DIVISION
RevenueIncome taxPension paymentsConflict of lawsAppellants paid pension payments by US and French governments in relation to periods of employment in those countriesWhether liability to income tax in UKWhether emoluments of office or employmentIncome and Corporation Taxes Act 1988 (cap 1), sec 18 and Sched D, Case V.
At various stages of their lives the appellants were employed abroad. They were in receipt of pension payments from the United States government and the French government in relation to periods of employment in those countries. An assessment on income tax of those payments was made upon the appellants. They appealed to the special commissioner against the assessment, who refused the appeal. They thereafter appealed to the Court of Session.
Held (1) that the question was whether the pension payments made by the US and French authorities were to be regarded as income arising from possessions out of the United Kingdom; (2) that a possession connoted a legal identifiable entity, which embraced an incorporeal right to money, especially if, as in the present case, in relation to both pensions, it was indefeasible; and (3) that both pensions fell within Case V of Schedule D to the Income and Corporation Taxes Act 1988 and, accordingly, were liable to tax in terms of sec 18 of the Act; and appeal refused.
Dr Norman Albon And Mrs D G Albon appealed to the special commissioner for HM Inland Revenue Commissioners in respect of assessments to income tax regarding certain pension payments received in the years of assessment and paid by the United States government and the French government in relation to periods of employment the appellants had in those countries.
The special commissioner refused the appeal.
The appellants thereafter appealed to the Court of Session sitting as the Court of Exchequer.
Cases referred to:
Aspin v EstillTAX [1987] 60 TC 549
Bray v BestUNK [1988] STC 103
Colquhoun v BrooksELR (1889) 14 App Cas 493
Inland Revenue Commissioners v WilloughbyWLR [1997] 1 WLR 1071
Oppenheimer v CattermoleELR [1976] AC 249
The cause called before an Extra Division, comprising Lord Kirkwood, Lord Caplan and Lord Johnston for a hearing on the summar roll.
At advising, on 31 July 1998, the opinion of the court was delivered by Lord Johnston.
Opinion of the CourtThis appeal at the instance of the taxpayers (the appellants) against a decision of the special commissioner with regard to the liability for assessment to income tax of certain pension payments, received in the years of assessment, and paid by the United States Government and the French Government in relation to periods of employment in those countries. The issue before the commissioner was entirely one of principle, it being agreed that, if there was liability to tax, that liability still had to be quantified.
The commissioner took evidence both verbally and in documentary form and made the following findings in fact: 4.1 find the facts to be as follows. Dr Albon was born in the United Kingdom in 1923. He pursued a scientific career and worked in the United States from 1960 to 1964 and in France from 1978 to 1984. The second appellant has resided in the United Kingdom since...
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