Mark McLaughlin looks at what ‘by reason of employment’ means and a Supreme Court decision highlighting its significance for tax purposes.
The UK tax system is full of potential surprises. For example, it sometimes treats certain situations and events as having occurred, which did not necessarily happen in the ‘real’ world.
Land of make believe
This ‘deeming’ can sometimes create a tax charge. The point was illustrated in Revenue and Customs v Vermilion Holdings Ltd (Scotland) [2023] UKSC 37 (see below).
Shares and securities acquired in connection with employment generally fall within the scope of the employment-related securities (ERS) tax regime. Within those provisions, the ‘securities options’ rules impose an income tax liability as employment income for gains on the exercise of an option if it is treated
