Appeal from the Decision of Lightman J of 14 October 1998 (Click here)

Sub-underwriting activities of the Post Office and British Telecom Pension schemes did not constitute trading within Case I of Schedule D. Instead, the sub-underwriting itself formed an integral part of the schemes’ investment process and took its colour therefrom. Accordingly the sub-underwriting commission was income chargeable under Case VI of Schedule D, but exempted by s.592(3) ICTA 1988.

In the context of s.686(2)(c) ICTA 1988, the word “property” was not wide enough to encompass a trade. Therefore, s.686(2)(c) did not exempt pension fund trading income from the additional trade of tax applicable to trusts.

Michael Flesch QC and Felicity Cullen appeared for the pension fund trustees