Geoff Jones and the lost Garnet(t)

THE HOUSE OF Lords has unanimously found for the taxpayers in Jones v Garnett [2007] UKHL 35 upholding the decision of the Court of Appeal although for different reasons.
The facts are well known by now. Very briefly when he was made redundant Mr Jones decided to become a freelance computer consultant. He and his wife acquired Arctic Systems Ltd off the shelf each being issued one ordinary share. He was the sole director she was the company secretary. He generated the income of the company by working full time for clients she worked for about four to five hours a week on administration. They both took low salaries and paid out the majority of the income of the company to themselves equally as a dividend.
There were two points at issue. First did this constitute a settlement (under the wide...