DB Group Services v HMRC

In DB Group Services v HMRC (A3/2013/0207 – 16 April 2014) the appeal concerned schemes implemented by UBS and Deutsche Bank (DB) to limit their liability to income tax and NICs on the payment of bonuses.

The UT had allowed the UBS appeal and dismissed the DB appeal; therefore both HMRC and DB were appellants.

UBS had invited senior employees to elect to receive a proportion of their bonus in shares instead of cash. It had set up an offshore SPV in which it subscribed for shares with a value equal to its bonus pool. The shares were eventually allocated to designated employees. The rights attached to the shares were meant to ensure that they were ‘restricted securities’(ITEPA 2003 s 423). They were subject to a condition as a result of which they may be subject to a ‘transfer reversion or forfeiture’ in consequence of...