Stevens v Tirard
| Jurisdiction | England & Wales |
| Judgment Date | 02 November 1939 |
| Date | 02 November 1939 |
| Court | King's Bench Division |
NO. 1141-HIGH COURT OF JUSTICE (KING's BENCH DIVISION)-
COURT OF APPEAL-
Income Tax - Relief in respect of children - Income of child in his own right - Payments by divorced father to former wife for maintenance and education of children - Finance Act, 1920 (10 & 11 Geo. V, c. 18), Section 21(3).
The Respondent, who had been divorced from his wife, was required under an Order of the High Court to pay to his former wife (who had custody of the three children of the marriage) three separate sums of £90, £90 and £70 per annum (less tax) for the maintenance and education of the three children, until they should attain the age of 21 years or previously marry. These sums were duly paid.
The Respondent claimed and was granted the appropriate child allowances but subsequently additional assessments were raised upon him to disallow the relief previously given, on the ground that each of the children was entitled in his or her own right to an income which by Section 21(3), Finance Act, 1920 (as amended) precluded the Respondent from being entitled to any deduction in respect of the children.
On appeal before the General Commissioners the Respondent contended that on a proper construction of the Order the payments made to his former wife on the children's account were not income of the children, so that he was not disqualified from receiving the allowances. The General Commissioners allowed his appeal and discharged the additional assessments.
Held, that the payments under the Order for the maintenance and benefit of the children were income of the mother and not of the children.
Stated under the Income Tax Act, 1918, Section 149, by the Commissioners for the General Purposes of the Income Tax, for the Division of Kensington in the County of Middlesex, for the opinion of the King's Bench Division of the High Court of Justice.
1. At a meeting of the Commissioners for the General Purposes of the Income Tax, acting for the Division of Kensington in the County of Middlesex, held at No. 23, Young Street, Kensington, W.8,
on the 29th day of June, 1938, Nestor Seppings Tirard (hereinafter referred to as "the Respondent") of No. 83, Sloane Street, S.W.1, appealed against the following additional assessments made on him under Schedule D of the Income Tax Act, 1918, in respect of disallowed children's allowances:-For the year ending 5th April, 1933, in the sum of £6
" " " 5th April, 1934, " " £130
" " " 5th April, 1935, " " £130
" " " 5th April, 1936, " " £100
" " " 5th April, 1938, " " £60
these additional assessments being arrived at by disallowing sums equal to the amounts of the assessments which had been previously allowed to the Respondent in respect of children's allowances.
2. The following facts were admitted or agreed:-
(a) In the year 1929 the Respondent was divorced by his then wife and she was given the custody of the three children of the marriage, John Seppings Tirard, Robert James Tirard and Ann Mabel Tirard.
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(b) By an Order of the High Court of Justice dated the 21st January, 1930 (a copy of which is annexed hereto and forms part of this Case(1) ), the Respondent was ordered to pay to his former wife
(i) For the maintenance of the said wife the sum of £500 per annum during the joint lives of the Respondent and the said wife
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(ii) For the maintenance and education of the said three children of the marriage, the following sums respectively during the said joint lives until the said children should respectively attain the age of twenty-one years or marry under that age, viz.:-
John Seppings Tirard
…
£90 per annum less tax
Robert James Tirard
…
£90 " "
Ann Mabel Tirard
…
£70 " "
(c) The Respondent had duly paid his former wife the sums mentioned in paragraphs 2, 3 and 4 of the said Order (less tax) and she, as guardian of the respective children, had preferred repayment claims on their behalf, on the basis that the said sums were the income of the respective children, which claims had been allowed.
(d) For the years in question the Respondent claimed and was allowed children's allowance at the appropriate rate of tax, in respect of these three children, in the first assessments made on him.
(e) The Respondent's returns for Income Tax did not disclose the amounts of the sums payable to his former wife in respect of each child but merely referred to them as "share in alimony".
(f) That on the attention of the Appellant being drawn to the said claims for repayment of tax made by the Respondent's former wife on behalf of the said children as aforesaid in respect of the amounts payable by the Respondent under the said Order, the matter was brought before the Additional Commissioners acting for the Division, who made the additional assessments now under appeal.
3. On behalf of the Respondent it was contended:-
(a) That the only question for the decision of the Commissioners was the correct interpretation to be placed on the said Order, so far as the payments made to the Respondent's former wife under paragraphs 2, 3 and 4 of the said Order in respect of the children were concerned.
(b) That on a true construction of the said Order the said payments were income of the Respondent's said former wife and were not income of the said children. The case of Jodrell v. Jodrell, 14 Beav. 397, was referred to.
(c) That the children's allowances referred to in paragraph 2 (d) hereof had been rightly made to the Respondent in the first assessments made on him and the additional assessments appealed against were wrong in law and ought to be discharged.
4. The Inspector of Taxes on behalf of the Crown contended:-
(a) That the case of Jodrell v. Jodrell had no application to the facts of the present case.
(b) That the said Order in this Case provided for the payment of three separate sums for the maintenance and education of the said three children respectively, that the wife received the sums mentioned in paragraphs 2, 3, and 4 of the said Order as guardian having custody of the children and that she was bound to account to them for those sums if required. The cases of Drummond v. Collins, 6 T.C. 525, and Johnstone v. Chamberlain, 17 T.C. 706, were referred to.
(c) That each of the said three children of the Respondent was entitled in his or her own right to an income which by Section 21(3) of the Finance Act, 1920 (as amended by subsequent enactments) precluded the Respondent from being entitled to any deduction under Section 21 of the Finance Act, 1920, or any other Section in respect of any of the said three children.
(d) That the additional assessments should be confirmed.
5. The Commissioners discharged the additional assessments.
6. Whereupon the Inspector of Taxes on behalf of the Crown expressed dissatisfaction with the Commissioners' decision as being erroneous in point of law, and we were duly required to state and sign a Case for the High Court of Justice, which we do hereby state and sign accordingly.
J.H. TOWNSEND GREEN.
TIMOTHY DAVIES.
C.B. CLAPCOTT.
JOSEPH SABEY.
FRANK MELLOR.
2nd December, 1938.
The case came before Lawrence, J., in...
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Sherdley v Sherdley
...with respect to the … maintenance and education of the children, the marriage of whose parents is the subject of the proceedings." 7 In Stevens v. Tirard [1940] 1 K.B. 204 the custody of the three children of a dissolved marriage was granted to the mother, and an order was made under sectio......
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Morley-Clarke v Jones
...the payments were ordered as "maintenance for the child" or children, it was clearly established by the decision of this court in Stevens v. Tirard, (1940) 1 King's Bench 204 that the moneys paid under such an order were the income of the recipient parent beneficially for all purposes and ......
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Yates (Inspector of Taxes) v Starkey
...part of the case I was referred to a decision of the Court of Appeal in the case of Stevens v.Tirard, reported in [1940] 1 K.B. 204, and 23 T.C. 321. That case, however, in my judgment, was a very different one and really affords very little assistance to me on this occasion. There the Orde......
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Yates (HM Inspector of Taxes) v Starkey
...part of the case I was referred to a decision of the Court of Appeal in the case of Stevens v.Tirard, reported in [1940] 1 K.B. 204, and 23 T.C. 321. That case, however, in my judgment, was a very different one and really affords very little assistance to me on this occasion. There the Orde......