Brumby v Milner
| Jurisdiction | England & Wales |
| Judge | Lord Wilberforce,Lord Diplock,Lord Simon of Glaisdale,Lord Kilbrandon,Lord Edmund-Davies |
| Judgment Date | 27 October 1976 |
| Judgment citation (vLex) | [1976] UKHL J1027-1 |
| Date | 27 October 1976 |
| Court | House of Lords |
[1976] UKHL J1027-1
Lord Wilberforce
Lord Diplock
Lord Simon of Glaisdale
Lord Kilbrandon
Lord Edmund-Davies
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Brumby (Inspector of Taxes) against Milner, That the Committee had heard Counsel for the Appellant, as well on Monday the 4th, as on Tuesday the 5th, days of this instant October, upon the Petition and Appeal of Samuel Milner of 130 Poolstock, Wigan in the County of Greater Manchester, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 3d of October 1975, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioner might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet; and Counsel appearing for the Respondent but not being called upon; and due consideration being had of what was offered for the said Appellant:
It is Ordered and Adjudged by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled. That the said Order of Her Majesty's Court of Appeal of the 3d day of October 1975, in part complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
In 1963 William Park & Co. Forgemasters Ltd. decided to set up a profit-sharing scheme for the benefit of its employees. A sum of £700,000 was provided on loan to Trustees, who were to use it to purchase shares in the Company to be held upon the Trusts of the scheme. These trusts were declared in a deed dated 25 September, 1963. Dividends on the shares were to be used either to pay off the loan or to make payments to employees of the Company and the scheme was so operated. Some £111,000 was applied in repayment of the debt, and £108,000 was distributed to employees, who individually received sums from £9-£14 a year after deduction of tax
Then in 1969 a change took place. The Company became a subsidiary of a holding company which also controlled an allied undertaking, and the directors had to decide what to do with the scheme. They decided that it was impracticable to continue it, and so they used the power, which they had under the Trust Deed, to terminate the scheme by one year's notice. The Trustees, then, realised the Trust assets, paid off the balance of the debt and, in accordance with the clause in the Trust Deed which provided for this situation, they decided to distribute the balance in proportions fixed by them between 1,802 employees and 49 pensioners. Mr. Milner, the appellant, was one of the employees and he became entitled to £200. When the Revenue heard about this they decided to assess him to income tax under Schedule E.
The test under Schedule E, now set out in sections 181(1) and 183(1) of the Income and Corporation Taxes Act 1970 is whether the sum in question is an emolument from the taxpayer's employment. "Emoluments" include any perquisite or profit. The only question in this, and in the many similar cases which come before the courts relating to such payments as cricketers' or footballers' benefits or for Easter offerings, or housing subsidies, is whether the emolument can be said to arise "from" the employment or office. In some instances, as the decisions show, this is not an easy question to answer: here it is plain.
The taxability of the annual distributions under the scheme is not an issue in this appeal but nobody has suggested, or could suggest that these were not taxable. The only question is whether any ground could be found for distinguishing the capital payments made on the winding up of the scheme. In my opinion, with all respect to the efforts of learned counsel for the taxpayer, there is no ground for any such distinction. I shall not attempt to demonstrate this by detailed analysis of the Trust Deed, or by reference to such authorities as may, possibly, be relevant, since this has been done to my complete satisfaction by the Court of Appeal, affirming Walton J. To restate the argument in words of my own, even if this were to result in a difference of formulation, would not be productive of advantage, and I am more than content fully to adopt the single judgment of the Court of Appeal delivered by Lord Russell of Killowen.
The appeal can only be dismissed.
My Lords,
I agree.
My Lords,
The issue in this appeal has, in my respectful opinion, been satisfactorily disposed of in the unanimous judgment of the Court of Appeal delivered by my...
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