Poles Apart

Settlements

ARCTIC SYSTEMS LIMITED is an information technology company whose directors and founder shareholders are Geoff Jones and his wife Diana. The Inland Revenue claimed that the TA 1988 s 660A settlement provisions applied to Diana's dividends because Geoff was the only fee earner.

On the first day of the hearing before the Special Commissioners the Inland Revenue dropped its claims to income tax in respect of 'discovery' assessments for earlier years which related to the greater proportion of the disputed liabilities. This was because of the particular and special circumstances of the case and should not be seen as indicative of future Revenue policy in this regard.

The case has been widely reported in both the tax and national press and was heard by the Special Commissioners Dr Nuala Brice and Miss Judith Powell in...