Court Of Appeal Hears Landmark UK Tax Case

by Robert Lee, Tax-News.com, London

01 December 2005

A landmark two-day case to determine the tax position of thousands of firms run jointly by married couples under Section 660A settlements legislation got underway in the Court of Appeal earlier this week.

The case in question centres on Geoff and Diana Jones, who are contesting a £42,000 tax bill relating to their company, Arctic Systems.

According to HM Customs and Revenue’s interpretation of the settlements legislation, the couple had sought to illegally reduce their tax bill by allocating income to the less active partner, who pays tax at a lower rate. It is said that about £1 billion in annual tax revenues depends on the outcome of the case.

According to Accountancy Age, Malcolm Gammie QC will deliver the Jones's arguments, while a representative of the Revenue will deliver its side.

Sir Andrew Morritt, chancellor of the High Court and the two other law lords are set to deliver a ruling in six to eight weeks' time. Crucially, this may fall after the self assessment deadline of January 31.

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