Morley-Clarke v Jones (Inspector of Taxes): CA 1986

In 1969 an order had been made in divorce proceedings for the payment by the husband to the wife of a sum by way of maintenance for their child. In 1979 the order was varied with effect from the date of the original order, so as to make the sum payable directly to the child, because this would be more tax efficient. It was certainly more tax efficient for the future, because the child had no other income. But the Revenue assessed the wife to income tax on maintenance received by her between 1969 and 1979 without regard to the retrospective variation.
Held: The assessments were upheld.
Oliver LJ said: ‘A retrospective order cannot, any more than a retrospective agreement, undo the past and convert something that has already happened, and to which legal consequences have already attached, into something which never in fact did happen . . [In Spence] the restitutio in integrum represented by the court order obtained some years later did not so much reconstruct history as recognise and declare that which had all along been the legal position, although until the order the parties were in a state of some uncertainty as to what their rights were.’


Oliver LJ


[1986] Ch 31


England and Wales


DistinguishedSpence v Inland Revenue Commissioners IHCS 1941
The taxpayer had sold shares to a third party in 1933 under a contract which he came to say had been induced by fraud. In 1939 he obtained a judgment reducing the contract, with effect from the date that it was made, together with orders that the . .

Cited by:

CitedJohn Mander Pension Trustees Ltd v Revenue and Customs SC 29-Jul-2015
The pension scheme had been approved, but that approval later withdraw. HMRC issued assessment for the years in which it had been approved. The taxpayer argued that such assessments applied to the date with effect from which the approval is . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 09 May 2022; Ref: scu.591248