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15A.2.1 Types of Convertibility |
A benefit may be converted in ways other than simple sale. In Abbott v Philbin16 an option to acquire shares was non-assignable but the employee was taxable on its value because money could have been realised in other ways—by raising money on the right to call for the shares. A Special Commissioner has held that where a taxpayer received rights under a contract of employment and those rights could be converted only at a price well below their intrinsic value, the right was not taxable at all.17 |
15A.2.2 Restricting Convertibility |
In Tennant v Smith Lord Halsbury said that a thing could be treated as money’s worth where the thing was capable of being turned into money ‘from its own nature’.18 However, in that case the only reason why the agent could not turn his occupation of the house into money was the fiat of his employer. Clearly, the loopholes in the tax net will be greatly widened if it is left to the employer to decide whether a benefit is convertible and so assessable. The courts have indicated that while restrictions imposed by employers may be treated as an effective restriction19 this will |