The Law Lords released their final judgement in the case of Jones v Garnett (also known as “Arctic Systems Ltd).
The Inland Revenue had previously lost this case in the Court of Appeal and as a result had appealed to the House of Lords.
The case concerned dividends paid by their company (Arctic Systems Limited) to Mrs Jones through which Mr Jones provided IT consultancy services.
In simple terms, the Inland Revenue believed that Mr Jones generated most of the profits of the company it was unfair that half of this income was then paid out to Mrs Jones by way of dividends.
The Law Lords ruled, unanimously, in favour of Mr Jones. If they had found in favour of the Inland Revenue Mr Jones would have been taxed on his wife’s dividend as if he had received it himself. |
