UBS AG v HMRC [2010]
March 2011
The scheme in this case aimed to pay tax-free bonuses, each exceeding £20,000, to over 400 employees by coming within a statutory exemption available for restricted securities. The offshore structure involved held up to scrutiny, nothing was considered a sham and the employer succeeded in funding the scheme without creating tax liabilities. But the First-tier Tribunal held that the financial engineering to prevent loss to the employees meant the shares awarded were not restricted securities. Also, even if its designers had fulfilled all the statutory conditions, the tribunal found the reality of the whole scheme fell outside the purpose of the restricted securities tax regime and so the scheme would have failed anyway.