HMRC have been given leave to appeal to the House of Lords so the saga continues.

For those of you who have been following this case with interest will remember that the case hinged on whether dividends paid by the company to the wife (who was not a higher rate taxpayer) could be taxed instead on her husband (who was a higher rate taxpayer). In the High Court the Judge decided that ‘well established principles’ (namely legislation relating to settlements and arrangements) could apply to the case. The Court of Appeal overturned the High Court’s decision. HMRC have now been granted leave to appeal to the House of Lords. This now puts those individuals whose affairs are similar to that of Mr and Mrs Jones in a difficult position as to reporting income on their tax returns.

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HMRC advice Jones and Garnett