Peter Hemingway, the appellant, made his appeal in relation to a claim for relief under section 401 of the Income Tax Act 2003 (ITEPA) over compensation he had received for the loss of rights under a stock option scheme.

The main issue in this appeal was whether a payment received by Hemingway shortly after his employer was the subject of a merger was taxable in full as being a payment in connection with the loss of Hemingway’s share options.

Or alternatively, in respect of the loss of his employment rights and so attracting relief in the first £30,000 paid to him.

Hemingway further argued that the relevant closure notice was not valid because the enquiry into an earlier voluntary tax return submitted by him was validated retrospectively by section 12D Taxes Management Act 1970.