Employment Income: Emoluments

27

for the payment (and the evidence needed to establish it). There is much sense in the argument in Shilton that the payment was made to end his employment with Nottingham Forest; however, this was not so on the facts as found. There may be good sense in abolishing the special treatment for golden handshakes altogether. Lord Templeman’s speech may be seen as a step towards achieving this objective by reducing the credibility of the distinctions in this area. Meanwhile, employees and their advisers know that if they want to bring the payment within section 403 they must be extremely careful.

9. Multiple causes—apportionment. Where a payment is made for two causes, one for future services and the other for compensation for loss of office or some other right, the courts will apportion the payment where possible.¹³⁶ Whether there will be an apportionment if the sum is paid for two causes, neither of which can be valued, remains unclear.¹³⁷

14A.5.3    Compensation for Modifying Contracts of Employment—Hunter v Dewhurst

A payment for the modification of the contract of employment ought, in principle, to be capable of escaping section 62 in the same way as a payment for termination.¹³⁸ However, in practice, where the contract of employment continues, it is very difficult to persuade the courts that the payment is one for giving up a right under the contract as distinct from a payment for the services still to be rendered. In Hunter v Dewhurst¹³⁹ the taxpayer wished to retire and live in Scotland, but the company wanted him to continue as a director, although undertaking less work for less pay. This rearrangement would have meant a reduction in a sum payable under a clause in the company’s articles prescribing

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