Irving v HM Revenue and Customs (HMRC)

The Court of Appeal has upheld the High Court and Special Commissioner’s decision that a non-cash contribution into a funded unapproved retirement benefits scheme (FURBS) should be treated as the employee’s income for the purpose of income tax.

The court held that the payment of assets convertible to cash amounted to the payment of a 'sum' under section 595(1) of the Income and Corporation Taxes Act 1988. As a result the court determined that HMRC was right to subject the transfer of shares to an income tax charge under Schedule E.

Although changes brought in by the Finance Act 2004 mean that this case is no longer relevant for contributions made after 6 April 2006 to employer financed retirement benefit schemes, this ruling is important to over fifty cases that raised this issue.