In Gain Capital Ltd v HMRC [2023] UKFTT 61 (TC) (19 January 2023) the First-tier Tribunal (FTT) held that amounts gifted to two former employees in order to enable them to repay loans entered into in connection with a historic deferred share plan constituted employment income in the form of general earnings from their respective employments and as such were subject to PAYE.
The FTT dismissed appeals by a company against PAYE determinations issued under the Income Tax (Pay As You Earn) Regulations SI 2003/2682 reg 80. The appeals related to a purported gift element of arrangements entered into by the individuals and various entities in the former employer group which were used to repay historic loans.
The deferred share plan arrangements were complex but involved in general the following steps:
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