Dickinson v Abel

Dickinson v Abel [1969] 1 All ER 484

Dickinson v Abel [1969] 1 All ER 484

Taxpayer not liable to income tax for money received following conditional promise

Facts

The defendant taxpayer was approached by the representative of a company which wished to buy farmland with which the taxpayer had a familial connection. The taxpayer is reported to have asked “What’s in it for me?” and was offered £10,000. The taxpayer received this money despite not offering any services in relation to the eventual sale.

Issues

The taxpayer was assessed for income tax on the sum of £10,000. However, at first instance, it was held that there was no contractual basis for the £10,000 payment. The sum was not a “payment for services” and, therefore, the assessment for income tax ought accordingly to be discharged. The Revenue appealed against this decision.

Decision/Outcome

The High Court dismissed the appeal. It held that the evidence was inconsistent with a contractual consensus, either express or tacit, between the taxpayer and the company which purchased the farmland. There was no evidence that the £10,000 was paid in return for some specified service made by the taxpayer. All that existed between the taxpayer and the company was a conditional promise made without valuable consideration. The Court, as an appellate tribunal, was precluded upon the basis of well-established principles from going against the findings of fact made at first instance. Accordingly, the payment of £10,000 was not chargeable in terms of income tax. It was irrelevant in determining whether there was a contractual consensus that the taxpayer believed that he had a moral right in the land in question. If fact, he had no interest in that land.

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