Revenue

Employment - retirement relief - entitlement of company director becoming non-executive director on ceasing paid employmentVenables and Others v Hornby (Inspector of Taxes) ChD (Mr Justice Lawrence Collins): 14 June 2001The taxpayer was managing director of his family company and responsible for its daily running.

In 1994, aged 53, he ceased to be employed by the company, becoming an unpaid non-executive director.He spent much time abroad but kept substantial company shareholdings and provided advice and guidance to family members who took over its management.

He was assessed to schedule E income tax on payments from the company's approved pension scheme.

His appeal was dismissed by a special commissioner who held that he had 'retired' within the relieving provisions of section 600 of the Income and Corporation Taxes Act 1988 but failed on the facts to comply with express provisions of the scheme concerning his health and early retirement.

The Crown and the taxpayer both appealed.Conrad McDonnell (instructed by Warner & Richardson, Winchester) for the taxpayer; Timothy Brennan QC (instructed by the solicitor of Inland Revenue) for the Crown.Held, dismissing the Crown's appeal and allowing that of the taxpayer, that the issue whether the taxpayer retired was one of fact and degree; that retirement connoted withdrawing from active work, the mere reduction in workload being insufficient; that the taxpayer's continued relationship with the company and his appointment as non-executive director did not detract from the commissioner's conclusion that he had retired; that, however, there was no evidence that the taxpayer's health disentitled him from taking early retirement; and that, accordingly, the commissioner had erred in upholding the assessment.