Dickinson v Abel
| Jurisdiction | England & Wales |
| Date | 1969 |
| Year | 1969 |
| Court | Chancery Division |
Revenue - Income tax - Schedule D Case VI - Payment to taxpayer in event of payor purchasing certain property not owned by taxpayer for less than £100,000 - Whether implied contract for some service to be performed by taxpayer - Whether payment chargeable under Schedule D, Case VI. - Contract - Implied contract - Consideration - Payment if offer to purchase certain property accepted by third party - Whether payment gratuitous or in return for service by payee.
The taxpayer's wife was a granddaughter of J.W. deceased, whose estate included land, Broadfields Farm, vested in trustees, and in which neither the taxpayer nor his wife had any interest. In 1964, a number of people made offers to the taxpayer to purchase Broadfields Farm which were transmitted by him to the trustees. On June 29, 1964, a representative of I Ltd. offered £100,000 for Broadfields Farm. The taxpayer told him that he was in no position to accept or refuse, and that any contract must be sent to the trustees. At the end of the interview, the taxpayer asked “What's in it for me?” The representative of I Ltd. said that I Ltd. would pay him £10,000 if they bought Broadfields Farm for £100,000 or less. The taxpayer did not at any time offer to speak to the trustees, nor were any services to be performed by the taxpayer mentioned by either party. The taxpayer did in fact telephone the trustees and, when asked by them for his opinion, said that he personally would accept the offer. In due course, the trustees sold Broadfields to I Ltd., and the taxpayer received £10,000 from I Ltd. He was assessed to income tax thereon under Case VI of Schedule D. He appealed to the general commissioners, who allowed his appeal on the grounds that there was no consideration for the promise to pay the £10,000 and, consequently, no contract; therefore no liability under Case VI arose.
On appeal by the Crown:
Held, dismissing the appeal, that, the commissioners having accepted that no services to be performed were specified or offered, and that the taxpayer did not know what was in the mind of the representative of I Ltd., and there being no evidence to the contrary, the court could not go behind the commissioners' findings.
(2) That the evidence was inconsistent with a contractual consensus, either express or tacit, between the taxpayer and I Ltd., and all that existed between them was a conditional promise made without valuable consideration; the payment was therefore, not chargeable under Case VI of Schedule D.
The following case is referred to in the judgment:
Moorcock, The (
The following additional cases were cited in argument:
Bloom v. Kinder (
Brocklesby v. Merricks (
Comptoir Commercial Anversois and Power, Son & Co.'s Arbitration, In re [
Edwards v. Bairstow & Harrison [
Housden v. Marshall [
Rellim Ltd. v. Vise (
Ryall v. Hoare [
Scott v. Ricketts [
Shirlaw v. Southern Foundries [
CASE STATED by the Commissioners for the General Purposes of the Income Tax Acts.
The relevant paragraphs of the case stated are as follows.
I. At a meeting of the Commissioners for the General Purpose of the Income Tax Acts for the Division of Offlow South in the county of Stafford held on April 18, 1967, K. H. Abel (hereinafter called the taxpayer) appealed against an assessment made on him in respect of a sum of £10,000 paid to him in the income tax year 1964–65.
IV. The following facts were admitted or proved: (a) the taxpayer is a farmer, (b) the taxpayer was married to a granddaughter of one Joseph Wint deceased (the taxpayer's wife is hereinafter referred to as “Mrs. Abel”). (c) Broadfields Farm, Croxall, Staffordshire, was one of the assets belonging to the estate of the late Joseph Wint. (d) The trustees of the estate of the late Joseph Wint were Lloyds Bank Ltd. (hereinafter referred to as “the bank”). (e) The trust on which the bank held Broadfields Farm was: (i) For the life tenant. She was the widow of the late Joseph Wint (herinafter referred to as “Mrs. Wint”), and was the grandmother of Mrs. Abel. (ii) Remainder to four daughters of Mrs. Wint. Of those four daughters one was the mother of Mrs. Abel and the other three were the aunts of Mrs. Abel. (f) The taxpayer and Mrs. Abel had no interest in the estate of the late Joseph Wint.
(g) Broadfields Farm was 240 acres in extent and was some 7 miles away from the taxpayer's farm. (h) The tenant of all but four acres of Broadfields Farm was a Mr. Shaw. Those four acres were leased to a Mr. Mallaber, who farmed the land adjoining Broadfields Farm. As far...
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...of Inland Revenue) for the Crown. Before: Harman J. The following cases were referred to in the judgment: Dickinson v. Abel WLR[1969] 1 W.L.R. 295 Edwards v. Bairstow & Anor. ELR[1956] A.C. 14 J.P. Harrison (Watford), Ltd. v. Griffiths (H.M.I.T.) TAX(1960) 40 T.C. 281 Corporation tax - Sch.......
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... ... … [155]Lastly, he referred me to a passage in the judgment of Pennycuick J in Dickinson (HM Inspector of Taxes) v AbelTAX (1968) 45 TC 353 ... The case was concerned with whether£10,000 received by a farmer and paid by would be purchasers ... ...
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...fall within Case VI.” 155. Lastly, he referred me to a passage in the judgment of Pennycuick J in Dickinson (HM Inspector of Taxes) v Abel 45 TC 353. The case was concerned with whether £10,000 received by a farmer and paid by would be purchasers of land in which the farmer had no interest,......