Poon Cho-ming, John v. Commissioner of Inland Revenue
Read the full judgment text of CACV 94/2016 on BabelCite. This Court of Appeal judgment was delivered on 1 June 2018.
1. I agree with the judgment of Yuen JA.
Cited by 6 cases · Cites 3 cases
|
CACV 94/2016 [2018] HKCA 297 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 94 OF 2016 (ON APPEAL FROM INLAND REVENUE APPEAL NO 2 OF 2015) ___________________
___________________ Before: Hon Macrae VP, Yuen and Kwan JJA in Court Date of Hearing: 16 May 2017 Date of Judgment: 1 June 2018 ____________________ J U D G M E N T ____________________ Hon Macrae VP: 1.I agree with the judgment of Yuen JA. Hon Yuen JA: 2.This is an appeal from a Judgment of Anthony Chan J given on 24 March 2016 in which he dismissed the appeal of the Appellant (“the Taxpayer”) from a decision of the Inland Revenue Board of Review (“BoR”) given on 16 June 2015 in which it was held that the Taxpayer was chargeable to salaries tax for:
3.1.The case stated (with the italicized words below added by the judge) was as follows:
3.2.Despite the rolled-up language, the parties approached the matter before the judge1 on the basis that the case stated challenged the conclusion of the BoR that neither the Sum D payment, nor the Share Option Gain, was:
and thus both Sum D and the Share Option Gain were chargeable to salaries tax. 4.1.Salaries tax is chargeable under Part 3 as follows:
4.2.Section 9 defines “income from any office or employment” to include
Background 5.Before discussing the arguments on appeal, it is necessary in the present case to set out the facts in some detail. 6.Pursuant to a Service Agreement dated 20 October 1999, the Taxpayer was employed as Group Chief Financial Officer and executive director of a large “brand name” clothing company incorporated in Bermuda and listed in Hong Kong (“the Employer”) with subsidiaries worldwide. He commenced employment on 3 December 19992. - The Service Agreement 7.The Service Agreement contained the following provisions which are material to this appeal:
- Employment 8.During the 8 years that followed his appointment as Group CFO and executive director, the Taxpayer became the Deputy Chairman as well as Company Secretary of the Employer, and a director of 34 subsidiary companies in 15 jurisdictions. He also had a public profile through appointments to public bodies. His evidence (which was accepted by the BoR) was that by reason of impressive financial results achieved during his tenure as Group CFO, he was highly regarded by the Employer’s investors and shareholders. - Discretionary Bonus 9.1.In respect of the Annual Bonus referred to in the Service Agreement (which was referred to in the Judgment as “the discretionary bonus”), the Employer did not have a formal bonus scheme with rules governing it6. 9.2.However the undisputed evidence before the BoR was that the normal procedure involved 3 stages of decision-making7. After every financial year-end on 30 June, audited accounts would be provided to executives of the Employer. At the first stage, these executives would make suggestions to the remuneration committee in August8. At the second stage, the remuneration committee would make a recommendation to the Board. At the third stage, the Board would make the final decision on the discretionary bonus to be awarded, which would normally be in September. As is usually the case, the award of a bonus would depend on various considerations including the Employer’s results and the individual’s performance. 9.3.For every year of his employment up to and including the financial year ended 30 June 2007, the Taxpayer had been awarded a bonus. 9.4.However when the Taxpayer’s employment terminated in July 2008, not even the first of the 3-stage process (which normally took place in August) had been completed. According to the written response from the Employer to the IRD9, the Taxpayer was not awarded any bonus for the financial year ended 30 June 2008. An “entirely arbitrary amount mutually agreed by [the Taxpayer] and [the chairman]” in lieu of discretionary bonus was paid “to eliminate any claim for unpaid bonus” for the financial year ended 30 June 2008. - The Employer’s Share Option Scheme 10.1.Returning to pre-termination events, by letters dated 26 November 2003, 27 November 2004 and 7 February 2007 respectively (“the Grant Letters”10), the Employer offered the Taxpayer options to subscribe for its shares, subject to the terms of a share option scheme adopted by the Employer in 2001. The Taxpayer accepted the terms of the offers by signing the respective Grant Letters. 10.2.It was a term and condition of the 2003 and 2004 Grant Letters that:
The 2007 Grant Letter had a similar term and condition couched in stricter terms, but it is not material to the issues before this court. 10.3.The subscription prices and vesting dates under the respective Grant Letters are summarized below11:
10.4.It can therefore be seen that as at July 2008, tranche A under the 2003 Grant Letter, and tranches B and C under the 2004 Grant Letter had not yet vested. (Tranche D under the 2007 Grant Letter had vested, although the option had not been exercised as at July 2008. Tranche D is not material to this appeal as it is not within the subject Share Option Gain). - Acceleration of Vesting Period 11.1.The terms of the Grant Letters provided however that in the event that the Taxpayer’s employment is terminated and salary is paid in lieu of notice by the Employer, the Board may “at its absolute discretion” accelerate the vesting period by allowing the Taxpayer to exercise all or such part of any unvested option that would have vested during the notice period. 11.2.Accordingly, for a 6-month notice period commencing in July 2008 (expiring in January 2009), the Board would have had a discretion under the terms of the Grant Letters to accelerate vesting of only 2 tranches, i.e. tranche A under the 2003 Grant Letter and tranche B under the 2004 Grant Letter, both of which would have vested in November 2008. - Period for exercise of vested option 12.The terms of the Grant Letters provided that the period for the exercise of vested options was within 6 years from the respective dates of the Grant Letters. However the rules of the 2001 scheme provided that upon cessation of employment, an employee grantee may only exercise a vested option within 3 months following cessation12. - Circumstances of Termination of Employment 13.The BoR found that the Taxpayer and his solicitor (both of whom gave evidence before it) were truthful witnesses. In summary, the evidence was to the effect that the chairman of the board (to whose position the Taxpayer had expected to succeed) informed him that the Employer was preparing to terminate his employment immediately and remove him from the offices he was holding. The Taxpayer was taken aback. In his solicitor’s words, he was in a “combative mood”13 and refused to “go quietly”. First, he proposed to challenge the chairman’s plans to remove him from his directorships by taking the matter to the shareholders, with a view to delaying his departure from the board, contrary to the wishes of the chairman and a majority of the board. Secondly, he was also prepared to take his claims to court, which would attract interest from the media, with consequential market reaction. The parties were in an acrimonious relationship, but after a weekend of negotiations involving lawyers on both sides, they eventually agreed the terms of the Separation Agreement. 14.1.The material facts accepted by the BoR were as follows. 14.2.On Friday afternoon, 18 July 2008, the chairman who was also the Group CEO informed the Taxpayer that the Employer was going to terminate his employment immediately and remove him from his directorship positions. No written notice was served or payment in lieu of notice was made then. 14.3.The chairman told the Taxpayer that he wished him to leave with immediate effect, that it would be better for both parties if they could come to terms to avoid adverse publicity, but that even if no agreement could be reached, the Employer would remove him anyway. 14.4.The chairman showed the Taxpayer a notice of a board meeting called for Sunday evening, 20 July 2008 for a resolution to the above effect to be passed. The notice referred to a Separation Agreement but the Taxpayer was not provided with a draft. 14.5.The chairman told him he would be given payment in lieu of notice and for accrued and unused annual leave. When the Taxpayer mentioned the unvested share options, the chairman said they could consider them if the parties could come to an agreed settlement. The matter of discretionary bonus was not mentioned. 15.1.The Taxpayer was aggrieved by the Employer’s action which he attributed to the chairman’s refusal to implement a “handshake deal” in respect of his succession to the chairman’s position, as well as disagreements over corporate governance and business strategy14. 15.2.The Taxpayer did not take the Employer’s decision “sitting down”. He was of the view that even though the Employer could terminate his employment as Group CFO, that was not the case with his position as executive director. He sought legal advice immediately15. 15.3.The Taxpayer considered that even though the chairman appeared to have the majority of the board, he was confident that he (the Taxpayer) had the support of the shareholders due to favourable financial results during his tenure as Group CFO. He took the view that the shareholders were “likely to regard my sudden dismissal unfavourably, particularly if I were to challenge the Board before a meeting of the shareholders (who, absent my consent, held the right to decide the matter)”16. 15.4.This reference to his consent was in respect of his directorships. The Taxpayer’s position was that he was not going to co-operate with the Employer by resigning his directorships. 15.5.What the Taxpayer had in mind was bye-law 86(4) of the Employer under which a director may be removed by resolution at a general meeting of shareholders, but 14 days notice would have to be given to convene the meeting, at which the director would be entitled to be heard. In the Taxpayer’s view, the requirement of notice for the general meeting and the opportunity for him to address shareholders “would not avail [the Employer] of an easy solution to secure my speedy removal on 20 July 2008”17. 15.6.In other words, the Taxpayer sought to delay his departure from the board, and to create negative shareholder reaction to the chairman’s action. He informed the chairman of his position. It is apparent that at that time, the Taxpayer did not consider that under cl.14.6 of the Service Agreement, he was obliged at the request of the Employer to resign from his offices upon termination of employment, and the Employer was authorized to execute on his behalf documents to effect his resignation. But it is notable that the BoR did not doubt his bona fides when he challenged the Employer’s plans and countered them with his proposed two-pronged course of action, which was supported by the legal advice he received at the time. 15.7.Apart from the directorship issue, the Taxpayer also challenged the validity of the restraint of trade clauses in the Service Agreement. 16.There were contentious negotiations over the weekend between the parties and their legal advisers. Eventually on Sunday 20 July 2008, the Separation Agreement was signed. - Separation Agreement 17.1.The material provisions included the following. 17.2.The Taxpayer’s employment terminated on the date of the Separation Agreement, ie 20 July 2008. 17.3.Under “Severance Compensation”,
17.4.Under Stock Options,
17.5.Under Settlement and Waiver,
17.6.Under Directorship,
17.7.Under Contract of Employment,
17.8.Under the Taxpayer’s Ongoing Obligations, the Taxpayer agreed:
17.9.Under Form of Announcements and Reference,
- Events after the Separation Agreement 18.The Taxpayer exercised the options in tranches A to C (as well as tranche D, which as indicated earlier, is not within the subject Share Option Gain). - Charge to Salaries Tax 19.In the Taxpayer’s Salaries Tax assessment in the 2008/2009 year of assessment, various sums were charged to tax. By the time the matter went to the BoR, the remaining issues were whether Sum D and the Share Option Gain were taxable24. BoR Decision 20.1.As noted above, the BoR accepted that the Taxpayer was a truthful witness. (It also accepted that his solicitor was a truthful witness, but decided that her evidence was of limited assistance due to the application of legal professional privilege and to her acceptance that she did not have in-depth expertise in the area of company law relating to the Employer’s constitution). 20.2.The BoR held correctly that the relevant test to be applied was that set out in Fuchs v CIR (2011) 14 HKCFAR 74, a judgment of the Court of Final Appeal. In summary, the CFA held that the key issue was whether the subject payment
In other words, the relevant test is the purpose of the payment. 20.3.In Fuchs (which will be discussed in greater detail later in this Judgment), the CFA discussed various scenarios which might occur when payment is made when a contract of employment is terminated, particularly “abrogation examples”, i.e. situations where a payment is made by an employer to an employee to compensate him for the abrogation of his rights as employee. 20.4.In the present case, the BoR held in respect of issue (A) that:
Accordingly, as:
he had not surrendered or foregone any rights under the Service Agreement, and so the payments were not compensation for the abrogation of his rights. 20.5.The BoR held in respect of issue (B) that:
21.The Taxpayer appealed by way of case stated. The judge’s Judgment 22.1.Essentially for the same reasons as those set out by the BoR, the judge affirmed its decision. 22.2.In respect of Sum D, he held that:
22.3.In respect of the Share Option Gain, he held that:
Appeal 23.The Taxpayer appealed. Discussion 24.There is no dispute that the law is that set out by the CFA in Fuchs. The issue is really whether, in light of the relevant circumstances of termination (including the Employer’s responses to the IRD and the finding by the BoR that the Taxpayer was a truthful witness), the BoR had erred in law in concluding that the payments were chargeable to salaries tax. 25.The following points are worth repeating.
26.1.In Fuchs, the taxpayer had a 3-year contract, under which it was expressly stipulated that if the contract was terminated by the employer during the term otherwise than by reason of the employee’s serious breach of contract or misconduct or mental disorder, the employer “shall pay to [the employee] as agreed compensation or liquidated damages” certain sums (the precise modes of payment are not material to this discussion). 26.2.As a result of a takeover, the employer terminated the employee’s contract at the end of the second year, and he was paid the sums referred to in the preceding paragraph, which was referred to in the termination agreement as “a one-time compensation for the loss of his position due to the termination of the employment relationship for operational reasons”. 26.3.The CFA held that the fact that “as a matter of language, it may also be possible to describe the purpose of that payment in some other terms, eg as ‘compensation for loss of office’46 does not displace liability to tax”. The payment was a sum stipulated in the contract to be payable to the employee in those circumstances and thus it was “from his employment”. 26.4.In Fuchs, the payment was clearly “from” employment, for his entitlement to the payment was from the contract of employment itself. The employer paid the sum in order to perform its obligations which had been set out in the contract to cater for those circumstances47. 26.5.Pausing here, I note that even in the case of a gratuity, the payment would still be chargeable if it is a reward from the employer (eg for past services) - even though the employer was not obliged to pay it, and thus the employee has no legal entitlement to it. However there is no argument in the present case that the Employer had given the Taxpayer the payments as a gratuity. 26.6.On the other side of the line are cases where the payment is clearly not “from” employment, eg damages obtained in proceedings against the employer for wrongful dismissal48, or payment in a settlement in such proceedings. The contract of employment did not provide for these types of payment. The employer only made the payment by reason of the litigation commenced against it, the payment having derived from a cause of action after the contract had been terminated49. 26.7.The Court of Final Appeal then considered some “abrogation” examples, where cases fell on one side of the “chargeability line”50 or the other51, depending on whether the employee was entitled under the contract to the payment. Thus in Hunter v Dewhurst 52, three directors left their positions in a company. Two received payments under an express article in the articles of association. These were chargeable. The chairman would have been entitled to a particular sum if he resigned in stated circumstances. After negotiations, it was agreed that he would not resign but would receive a smaller salary and attend work occasionally as a director. The payment he received for this agreement was held by the House of Lords not to be chargeable. In substance it was paid by the employer “to obtain a release from its contingent liability” (i.e. for the particular sum payable if he had resigned) under the contract53. 26.8.At §22 of Fuchs, Ribeiro PJ said this:
27.1.It is clear from the above passage that the test, whether in a termination situation or not, is the purpose of the payment. Absent any argument that the payment was a gift, the question is: was it paid because the employee was being rewarded for services under the contract of employment? The “abrogation” examples illustrate the application of that test. Thus if a payment is made to an employee only in consideration of his agreeing to surrender or forgo his pre-existing contractual rights, that payment is not made pursuant to the employee’s entitlement under the contract of employment. 27.2.However it is important to note that “abrogation examples” are just that - they are only examples, and “abrogation of contractual rights” is not itself the test of chargeability in every termination situation. The test is not whether the employer had acted in breach in terminating the contract. In every case, the test remains that of the purpose of the payment at the relevant time. If the employee was entitled to the payment under the contract of employment, then the purpose of the payment was in order for the employer to perform its obligations under the contract, and it follows that the payment was income “from” the employment. But if the employee was not so entitled, then one must consider the purpose for which the employer made that payment. 28.In the present case, with respect to the BoR and the judge, I have come to the conclusion that, on the facts found by the BoR, Sum D and the Share Option Gain were not payments to which the Taxpayer was entitled at the relevant time under his contract of employment, and the purpose of the payments from the Employer was, not to perform its obligations under the contract or to reward the Taxpayer for past services, but to stave off the Taxpayer’s threatened two-pronged course of action (to approach the shareholders and to take the matter to court) and get him to “go quietly” by entering into the Separation Agreement with him. 29.1.The BoR had accepted that “one may say that the benefits offered by the Company to the Taxpayer including Sum D and accelerating the vesting dates of the Relevant Options are consideration to make the Taxpayer go away quietly”54. However it concluded that the payments were nevertheless chargeable. 29.2.With respect I do not agree with the BoR (and the judge) in that conclusion. 30.First, in respect of Sum D, the judge accepted that the Taxpayer had no accrued right to a bonus55. However, with respect, he was in error in relying on the fact that “he had performed his duties as an employee of the Company for the year ended 30 June 2008”. At the relevant time, the 3 stages for the exercise of discretion for the award of the discretionary bonus had not been undertaken. There was no evidence that the Group’s results for that financial year had been considered for the purpose of deciding whether a bonus should be awarded to any of its staff. Nor was there evidence that the Taxpayer’s performance during that financial year had been considered for the purpose of deciding whether a bonus should be awarded to him. There was no evidence that the quantum of Sum D was decided even on a “guesstimate” of what he might have received if a bonus were to be awarded to him. 31.On the contrary, the unchallenged evidence from the Employer was that the Taxpayer was not awarded any bonus for the financial year ended 30 June 200856. An “entirely arbitrary amount mutually agreed by [the Taxpayer] and [the chairman]” was paid “to eliminate any claim for unpaid bonus”. Applying the Fuchs test of purpose, the purpose of the payment has been clearly expressed there. It was to avoid any litigation from the Taxpayer (even if the Employer would have been successful at the end). 32.1.It is notable that in the course of arguments, the question was posed by the court to counsel for the Commissioner what would have been the situation if after the events on Friday, the Taxpayer had issued a writ on the Saturday, and the Separation Agreement was made on the Sunday. His answer was that the Commissioner would not have been able to argue that the payments were assessable. 32.2.Indeed the present case is similar to the payment in Hunter v Dewhurst where the sum in question was paid for the Employer “to obtain a release from its contingent liability”. That sum was held by the House of Lords to be not chargeable to salaries tax. 33.With respect to the BoR and the judge, I do not agree that it is appropriate to refer to the purpose of the payment as the purchase by the Employer from the Taxpayer of the opportunity to be considered for a bonus. Even though the Taxpayer’s solicitor had pitched his case to the Employer on the basis that he should be compensated for the loss of the opportunity, there was nothing akin to an assignment of a chose in action, and the Employer’s clear response to the IRD was that the purpose of paying Sum D was only to avoid all litigation. 34.1.Nor, with respect, was it helpful to consider whether, had the contract not been terminated, the Taxpayer would have had to pay tax in the ordinary course on receiving a discretionary bonus. Of course payment made in those circumstances would be chargeable. But that was not the test set out in Fuchs. One must consider the actual facts surrounding the subject payment at the relevant time, and determine what was its purpose or nature. 34.2.Thus in Henley v Murray (which was quoted by the CFA in Fuchs), the managing director was paid the exact equivalent of the amount he would have received if his contract had not been terminated prematurely. But as that payment had not been provided for in his contract in the event of premature termination, it was held that the sum was not chargeable. 34.3.That demonstrates that it is not relevant whether the payment would have been chargeable if the contract had not been terminated. What is relevant is the purpose or nature of the subject payment at the relevant time. Here, in light of the facts found by the BoR, it is clear to me that Sum D was not income “from” the Taxpayer’s employment, but a payment he obtained from the challenges he posed to the Employer which led to negotiations culminating in the Separation Agreement. It was the antithesis to a reward for his services under the contract of employment. 35.1.As for the Share Option Gain, with respect to counsel for the Commissioner, it is irrelevant that the options were granted when the Taxpayer was employed. It is not the grant but the vesting that is of benefit to the employee. It is clear that at the time of termination, the Taxpayer did not have any accrued rights to the share options of tranches A - C as they simply had not vested57. If the Employer had not accelerated the vesting date as part of the Separation Agreement, they would have lapsed. (The BoR’s reliance on the words “may lapse” is, with respect, misplaced for these words cater for the possibility of acceleration). It was only as a result of the Employer’s decision to accelerate the vesting dates to the Separation Date that the Taxpayer was able to take the benefit of those tranches. 35.2.Was the acceleration a benefit “from” the employment or office? It is correct that for tranches A and B, the Grant Letters did provide that the board may in its absolute discretion accelerate the vesting dates during the notice period. However it is notable that the board accelerated the vesting date for tranche C as well, which was not within the notice period and which was therefore not provided for under the Grant Letters. In this connection, the following questions from the IRD and answers provided by the Employer are material:
35.3.Although the language used by the Employer was not similar to that used for Sum D58, the purpose of the acceleration was expressed as “to settle all outstanding matters upon the cessation of Mr Poon’s employment”. Whilst it may be said that this might have meant a settling of mutual rights and obligations under the contract, it is significant that in Answer §18(b), no differentiation was made between tranches A and B (which would have vested within the notice period and were therefore covered by the Grant Letters) and tranche C. For tranche C, accelerated vesting was out of the question. 35.4.In my view, this absence of differentiation is significant as it points to the purpose of the conferment of the benefit as a whole - as the BoR found, “the benefits offered by the Company to the Taxpayer including Sum D and accelerating the vesting dates of the Relevant Options are consideration to make the Taxpayer go away quietly”. (Emphasis added). This finding of fact did not make any distinction between tranches A and B of the one part, and tranche C of the other. 35.5.The evidence in support of this finding includes not only the Employer’s Answer §18(b), but also the evidence that on 18 July 2008 when the Taxpayer mentioned the unvested share options, the chairman said they could consider them if the parties could come to an agreed settlement. (In any event, even if I am wrong in relation to tranches A and B, given the judge’s conclusion that the Taxpayer had managed to “augment his legal entitlements” by getting the Employer to accelerate the vesting of tranche C, this tranche would not be chargeable). 36.Therefore, with respect to the BoR and the judge, I take the view that the acceleration of vesting leading to the Share Option Gain was also not a benefit given for the purpose of rewarding the Taxpayer for services past present or future, but for another reason, viz. it was consideration for him to drop his proposed two-pronged course of action, and to agree to present a united front with the Employer (both internally and to the public) on the reason for his departure (as set out in the annexes to the Separation Agreement), amongst other additional covenants set out in that Agreement59. 37.Applying the test in Fuchs, for the reasons set out above, I take the view that neither Sum D nor the Share Option Gain is chargeable to salaries tax, the answer to the case stated is yes, and the appeal should be allowed with costs. Hon Kwan JA: 38.I agree with the judgment of Yuen JA.
Mr Adrian Huggins SC, instructed by King & Wood Mallesons, for the Appellant Mr Stewart Wong SC, instructed by the Department of Justice, for the Respondent 1 §21, Judgment. 2 §12, BoR Decision. 3 Defined in clause 1(C) of the Service Agreement as the date on which the employment of the Taxpayer terminates save pursuant to an assignment. 4 In clause 11.1 of the Service Agreement. 5 See fn 4. 6 Employer’s letter to IRD dated 10 July 2012, §3(a). 7 §48, BoR Decision. 8 §23, Judgment. 9 Employer’s letter to IRD dated 18 March 2011. 10 §14, BoR Decision. 11 §15, BoR Decision. 12 §§5.2(b), Agreed Facts. 13 Fiona Mary Loughrey Witness Statement §13. 14 Taxpayer’s Witness Statement §7. 15 Ms Loughrey’s Witness Statement §3. 16 Taxpayer’s Witness Statement §11. 17 Taxpayer’s Witness Statement §18(c) but see §20.4 below on bye-law 90. 18 Defined in cl.1.1 of the Separation Agreement to mean 20 July 2008, being the date upon which the Taxpayer’s employment with the Employer terminates. 19 See §10.4 above. 20 Defined to mean any claim under the Employment Ordinance and other specified ordinances: cl.1.1, Separation Agreement. 21 Defined to mean, amongst others, the Employer’s officers: cl.1, Separation Agreement. 22 The 3-month restraint of trade clause. 23 Defined in the Listing Rules. 24 A third issue, viz. the relevant date for computation of the notional gain, was not in issue before the judge or this Court. 25 §14, Fuchs. 26 §18, Fuchs. 27 §38, BoR Decision. 28 §54, BoR Decision. 29 §55, BoR Decision. 30 §62, BoR Decision. 31 §70, BoR Decision. 32 §71(c), BoR Decision. 33 §77, BoR Decision. 34 §24, Judgment. 35 [1967] 1 Ch 772, 815. 36 §31, Judgment. 37 §33, Judgment. 38 §40, Judgment. 39 §41, Judgment. 40 Henley v Murray (Inspector of Taxes) (1950) 31 TC 351, 360. 41 Hochstrasser (Inspector of Taxes) v Mayes [1960] AC 376, quoted in Fuchs, §16(a). 42 Hochstrasser, quoted in Fuchs, §16(b). 43 §16, Fuchs. 44 Shilton v Wilmshurst (Inspector of Taxes) [1991] 1 AC 684, quoted in Fuchs §16(c). 45 Hochstrasser, quoted in Fuchs, §19. 46 As in Fuchs. 47 §20, Fuchs. 48 Cf London and Thames Haven Oil Wharves Ltd supra. which was relied on by the Commissioner and accepted by the judge: §25, Judgment. 49 §19, Fuchs. 50 As in Dale v de Soissons [1950] 2 All ER 460, where the employee was paid a sum stipulated in the contract on the employer’s exercise of an option to terminate his contract. 51 As in Henley v Murray, supra, where the employee was asked to leave the company before his term expired but was paid the equivalent of what he would have received at the expiry. Nevertheless as the payment was not provided for under the contract, it was not chargeable to salaries tax. 52 (1932) 16 TC 605, quoted in §21, Fuchs. 53 §21(a), Fuchs. 54 §76, BoR Decision. 55 §33, Judgment. 56 §8, Employer’s letter to IRD dated 18 March 2011, and §3(c) Employer’s letter to IRD dated 10 July 2012. 57 Similar to the situation in Commissioner of Inland Revenue v Elliott [2007] 1 HKLRD 297, §§24-25, where the Taxpayer had no right to “cash-out” certain incentive units until a later date. 58 “To eliminate any claims” 59 Listed at p.13 of the Skeleton of the Appellant Taxpayer. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under CACV 94/2016