An impending House of Lords’ case should provide guidance about the way husband and wife businesses may be taxed, says Richard Anderson
The case of Jones v Garnett (Inspector of Taxes) arose as the result of a combination of events. A couple met and married in 1981. She worked in management until 1989 when she left her employment to start a family. He worked in IT as an employee of a number of public companies until about 1989 when he was made redundant. They decided that their best option was to set up their own business and become self-employed. The wife, they decided, would assist for some hours using the management and accounting skills she had learned while working, but would also stay at home looking after the family and the home, supporting her husband in this new venture and leaving him free to devote to it all of his energies.
options
There are several ways in which the couple could have put that decision into effect—the husband could have been a sole trader; they could have gone into partnership together; or
