Skip to content


HMRC wins appeal to the Upper Tribunal in the Aberdeen Asset Management case

This case, Aberdeen Asset Management PLC v HMRC, concerned the acquisition by employees of shares in specially-formed “money-box” companies. The issues on appeal were: (a) did each employee in reality receive a payment of money, rather than shares?; (b) should each employee be treated as receiving, when he acquired the shares, the money owned by the company on the basis that this was then unreservedly at his disposal?; and (c) whether the shares in each company were properly to be regarded as ‘readily convertible assets’ for PAYE purposes?

Warren J. held that emoluments do not fall within (old) s 202B (now s 702 ITEPA 2003) – which is concerned with identifying the time at which PAYE is due – simply because they are realisable into money. If a non-money benefit is not a payment for the purposes of s202B, an emolument which does not take the form of a benefit consisting of money cannot be treated as a payment for the purposes of sections 203, 203A and 203B (since re-enacted as s 686 ITEPA 2003). The transfer of shares in each ‘money-box’ company to an employee was not a “payment” for the purposes of s203 as the powers it gave to the employee were not “as good as cash”, nor was the employee immediately able to turn the shares into a benefit consisting of money. The money in the company was not unreservedly at the disposal of the employee. 

However, the shares in each company were properly to be treated as “readily convertible assets” and the employer was therefore to be treated as making a payment of income of that amount.