[The appeal against this decision is reported at [1996] BTC 322.]

Mr THK Everett.

Decision released 25 May 1995.

Income tax – Settlement – Preference shares issued to wives of directors and sole shareholders – Substantial dividends paid to holders of preference shares – Whether arrangement constituting a settlement – If so, whether a revocable settlement – Whether dividends to be treated as income of settlor – No arrangement constituting a settlement – Appeal allowed – Income and Corporation Taxes Act 1988, s. 672(1)(b), 674A(1)(d).

Alun James, counsel instructed by Herbert Parnell, chartered accountants, for the taxpayers.

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