No avoidance

Mr and Mrs Ebsworth owned a company BSAS1 in the proportion of 51% and 49%. It was an incorporated partnership with Mr Ebsworth as the main driving force and Mrs Ebsworth dealing with the finance element.

They had been married for several years but in 1998 separated. Mrs Ebsworth then wanted to leave the business and wanted to extract her share of the money from it.

BSAS1 comprised two divisions: network and hardware. The network division provided customers with an alternative WorldCom to BT for their telephone calls.

A key agreement with WorldCom was that it could take over and operate the customer base in return for a lump sum termination payment known as a balloon payment. This it did in 2001. The hardware division provided telephone handsets.

It was decided to liquidate BSAS1 once the balloon payment was received with a view to making...