Inland Revenue Commissioners v Herd

The core legal question concerned whether a gain on the sale of shares fell to be taxed as employment income under Schedule E and related statutory provisions, and whether a purchaser was obliged to deduct tax under the Income Tax (Employments) Regulations 1973 (Regulation j-j 13 as cited). The judgment identifies Schedule E and the Income Tax (Employments) Regulations 1973 together with Finance Act 1972 s 79(1) and Finance Act 1976 s 67(1) as the relevant statutory material for the issues in dispute.

The detailed disposition of the appeal and the court's full reasoning for its decision are not stated in the judgment.

Background and parties: The dispute was between the Inland Revenue Commissioners and Herd concerning the tax treatment of a gain arising on the sale of shares and the incidence of any obligation on a purchaser to deduct tax.

Nature of the claim: The matter involved a challenge about whether the gain on the sale of shares was assessable as employment income under Schedule E and whether the purchaser was required to operate a deduction under the Income Tax (Employments) Regulations 1973 (Regulation j-j 13). Statutory provisions specifically referred to included Finance Act 1972 s 79(1) and Finance Act 1976 s 67(1).

Procedural posture: The case was before the Appellate Committee of the House of Lords. The prior procedural history and lower court decisions are not stated in the judgment.

Issues framed:

• Whether the gain on sale of shares constituted employment income taxable under Schedule E.
• Whether, as a consequence, the purchaser was obliged to deduct tax under the Income Tax (Employments) Regulations 1973 as cited.

Court's reasoning and outcome: The judgment identifies the statutory provisions and frames the two principal issues above, but the detailed reasoning on those issues and the operative outcome of the appeal are not stated in the judgment.