Till dividends do us part

In an appeal featuring a husband and wife dividends and different share classes HMRC raised questions about the laws involving business marriage and settlements.

The case began when an engineering business founded by Mr Henson in August 1978 changed ownership after a share sale agreement was entered into on 14 January 2000.

It was purchased by the appellant and his wife Mr and Mrs Patmore and had been funded by a mortgage on their jointly-owned matrimonial home.

Mr Patmore’s ownership increased by 83 shares leaving him with 98% of the shareholding as well as making him the sole director. His wife on the other hand received two shares thus giving her a 2% shareholding as well as the title of company secretary.

On 31 March 2000 a meeting took place where the existing 100 shares we re-named A shares....