F6. Shares to employees

- Shares as convertible earnings

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- In Weight v. Salmon directors were permitted to apply to acquire shares in the employer at par, which T did. At all material times the shares allotted could be sold in the market for a sum significantly above par value.

- Held: the shares came within "profits whatsoever" and the taxable sum was the difference between the amount paid and the value as at the date of allotment. 

- "I think it is really impossible to appreciate the argument which suggests that that was not an immediate profit in the nature of money's forth received by the Director as remuneration for his services." (at 193)

- There was no right prior to receiving the shares: "It is to be observed that while the Board have expressed their willingness to entertain an application for these shares, nobody was bound and no right was given and no profit was received of any kind by the Appellant until the application had been accepted and the shares in question had been allotted to him." (at 193)

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Legislation: 

Cases:

Weight v. Salmon (1935) 19 TC 174 (HoL); 

HMRC manuals: 

Commentary: 

See also:

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