Jones V Garnett (HMIT) [electronic resource]
Jones V Garnett (HMIT) [electronic resource]
- 2007
[2007] UKHL 35, 25 July 2007. The Revenue (G) appealed against a decision that arrangements which the respondent company owner (J) had with his wife had not amounted to a settlement within the meaning of the Income and Corporation Taxes Act s660A(1). J's wife provided administrative support to his computer consultancy company. J was appointed sole director with his wife as secretary. On their accountant's advice, both drew low salaries and distributed the income between them as dividends. G argued that this amounted to a settlement, and that shares in the company given to his wife for the nominal sum of £1 had not been an outright gift within the meaning of the Act. "Held": The Act had defined a settlement quite broadly, and through the introduction of the concept of bounty. Since J's wife had received considerably more worth than her payment of £1 it was unavoidable that there had been a distinct settlement. Once this was accepted it was difficult to avoid the conclusion that a gift had been made. Once this was decided, the definition of an outright gift was no longer helpful. Appeal dismissed.
INCOME AND CORPORATION TAXES ACT 1988
JONES V GARNETT (HMIT) (2007)
England and Wales--1543-
[2007] UKHL 35, 25 July 2007. The Revenue (G) appealed against a decision that arrangements which the respondent company owner (J) had with his wife had not amounted to a settlement within the meaning of the Income and Corporation Taxes Act s660A(1). J's wife provided administrative support to his computer consultancy company. J was appointed sole director with his wife as secretary. On their accountant's advice, both drew low salaries and distributed the income between them as dividends. G argued that this amounted to a settlement, and that shares in the company given to his wife for the nominal sum of £1 had not been an outright gift within the meaning of the Act. "Held": The Act had defined a settlement quite broadly, and through the introduction of the concept of bounty. Since J's wife had received considerably more worth than her payment of £1 it was unavoidable that there had been a distinct settlement. Once this was accepted it was difficult to avoid the conclusion that a gift had been made. Once this was decided, the definition of an outright gift was no longer helpful. Appeal dismissed.
INCOME AND CORPORATION TAXES ACT 1988
JONES V GARNETT (HMIT) (2007)
England and Wales--1543-