UBS AG v. HMRC; DB Group Services (UK) Ltd v. HMRC

Holding

Bonus arrangements using shares with forfeitable conditions designed to bypass income-tax employment-related-securities rules were not effective; the realistic view of the arrangement controlled.

Facts

UBS and Deutsche Bank used schemes to pay employee bonuses in shares with restrictions designed to qualify for employment-related-securities treatment producing a tax advantage.

Reasoning

Lord Reed applied a purposive interpretation and a realistic view of the arrangements, holding the planning ineffective. The decision continued the modern UK approach combining Ramsay with purposive construction.