The United Kingdom Privy Council is to decide whether former Air Jamaica workers should pay income tax on their 50 per cent share in the $400 million surplus in the pension fund in 1994.

The Court of Appeal yesterday granted final leave to the trustees of the fund to challenge a Court of Appeal ruling last year.

Revenue Court Judge Roy Anderson had ruled in December 2003 that the former employees' share in the fund was not liable to income tax. The Commissioner of Taxpayer Audit and Assessment appealed and the Court of Appeal ruled that tax should be paid on the surplus.

Suit against state

After the Government sold the national airline in 1994 to the Air Jamaica Acquisition Group, the former workers filed a suit against the state.

The workers claimed they were entitled to the surplus in the pension fund.

The United Kingdom Privy Council ruled in 1999 that the surplus belonged to Air Jamaica and the former workers.

CIBC Trust and Merchant Bank, now First Caribbean Securities, and former Air Jamaica workers, Joy Charlton and Ian Blair are the trustees. The former workers have since been paid their entitlements in the pension fund.