| 21/8/2008 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 32 |
Decided on 1st June 1962 |
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Taxability Of Allowances Received By An Employee Sent To Study Abroad By Her Employer
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The taxpayer was a teacher who was sent abroad by her employer (the Government) to obtain qualifications necessary for her promotion. During this period her normal salary was suspended and she received (apart from reimbursement of traveling expenses) a "local commitments allowance" and a "maintenance allowance" which, together, were in excess of her normal salary.
The Board refused a claim that everything she received as above constituted a scholarship and was therefore exempt. But the Board held that the excess over the normal salary was not gains or profits from employment, and that that part was therefore exempt.
The appeal to the Court made by the Commissioner was limited to the excess declared exempt by the Board as above, and the taxpayer did not enter a cross appeal on the grounds that all her receipts originated from a scholarship. The Court therefore only had narrow grounds to decide, and it agreed with the Board that the excess received as aforesaid by the taxpayer over and above the amount of her normal salary did not constitute gains or profits from her employment, and were merely re-imbursements of expenses.
N.B.: There were later Court decisions on the same subject matter, and the law was eventually changed.
BSC Case No: 16/59
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