Dracup v Radcliffe
| Jurisdiction | England & Wales |
| Judgment Date | 11 March 1946 |
| Court | King's Bench Division |
| Date | 11 March 1946 |
No. 1343-HIGH COURT OF JUSTICE (KING'S BENCH DIVISION)-
Income Tax, Schedule E - Basis of assessment - Emoluments in respect of Income Tax year voted to director of company after end of that year - Whether assessable to Income Tax for that year.
The Appellant was appointed director of a company on 18th May, 1942, and an assessment was raised for the year 1942-43 on remuneration voted to her on 28th July, 1942, in respect of her services from date of appointment to the end of the company's year on 30th June, 1942, and on the proportion to 5th April, 1943, of the remuneration for the year to 30th June, 1943, voted to her on 27th July, 1943.
The Appellant contended that the assessment should be based on the remuneration voted on 28th July, 1942, and no more.
Held, that the assessment was correct.
Stated under Section 149 of the Income Tax Act, 1918, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice.
1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on 24th April, 1945, at Leeds, Mrs. Maria Dracup (hereinafter called "the Appellant") appealed against assessments made upon her under Schedule E of the Income Tax Acts for the years 1942-43 and 1943-44 in the sums of £1,192 and £681, respectively, in respect of her emoluments as director for those years, and the sole point in dispute is as to the correct basis of assessment in the circumstances hereinafter appearing.
2. The Appellant was appointed director of Messrs. Robinson & Peel, Ltd., woolcombers, on 18th May, 1942, under article 81 of the articles of association of that company under which any casual vacancy could be filled by the directors, the person so appointed acting until the next annual general meeting when he or she would be eligible for re-election.
3. The company's year ended on the 30th June in each year, and on 28th July, 1942, at the company's annual general meeting, £1,500 tax free was voted to the directors for the year ended 30th June, 1942, in accordance with article 69 of the company's articles. A copy of article 69 of the memorandum and articles of association of the company is annexed hereto, marked "A", and forms part of this Case, and a copy of a letter dated 14th August, 1944, is also annexed hereto, marked "B", and forms part of this Case(1).
The division of the sum so voted was left to the directors, and at a meeting of directors on 28th July, 1942, before the annual general meeting, it was resolved that £375 tax free be recommended to be paid to each of the four directors including the Appellant. Similar sums were voted on 27th July, 1943, for the year to 30th June, 1943, and in July, 1944, for the year to 30th June, 1944, and divided in the same way.
4. In calculating the Appellant's liability for the year 1942-43 H.M. Inspector of Taxes computed the figures as follows:-
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