At last, it has been announced that the Arctic Systems case will be heard in the House of Lords from 5 to 7 June 2007. The case, and the subsequent uncertainty, has now been running for more than two years and it is to be hoped that some sort of finality to this issue can be obtained before the end of 2007.

Just in case you need a reminder, the case concerned a company owned by a husband and wife, Mr and Mrs Jones, and hinged on whether dividends paid by the company to Mrs Jones (who was not a higher rate taxpayer) should be shown on her husband self assessment return and taxed as his income at a higher rate of tax.

HMRC won the original case heard by the Special Commissioners. The taxpayer subsequently appealed to the High Court, and HMRC also won this hearing. However, HMRC lost in the Court of Appeal. HMRC’s petition to the House of Lords for permission to appeal was granted and the appeal will be heard from 5 June 2007.

Internet Link:

HMRC statement