The High Court has decided in favour of the Inland Revenue in the landmark 'Arctic Systems' section 660A case.
The Professional Contractors Group (PCG) announced that Geoff and Diana Jones of Arctic Systems Limited have lost their appeal to the High Court, heard by Justice Park last month.
The decision handed down today, 27 April, means that the settlements legislation will apply to dividends received by Diana Jones and deem them to be her husband's income, taxable at his marginal rate of income tax.
The first indications are that the judge came down "very heavily" on the Revenue's side, one source told TaxZone.
The Forum of Private Business (FPB) reacted with "dismay", saying the decision could have "serious and expensive consequences for thousands of husband and wife firms".