The Perils Of Disorganisation ' Who's The Winner?

• Published date: 07 June 2023
• Law Firm: Withers LLP
• Author: Ms Alexandra Dix

A recent High Court case¹ highlights the dangers of trying to arrange your affairs in a tax efficient way, but then failing to stick by those plans.

Mr Dines was a 'shrewd' (in the judge's words) businessman but 'hopelessly disorganised' with his paperwork - leading to a bitter fight between his children and second wife in Court over properties worth more than '1m.

Background

Graham Dines had two children, Louise and Elliot, with his first wife. Graham had several affairs and, in 1992, met Helen, who became his second wife.

Graham ran a property investment business, Provincial Equity Finance Limited ('PEF'). PEF purchased flats in Bath and Bournemouth, which it then let or sold. Initially, these flats were bought in PEF's name but in the late 2000s, Graham decided to buy properties in his own, Helen's and/or Elliott's names. It appears he thought that if a vendor knew that the purchaser was a company, the vendor would assume it was a property business (which it was!) and demand a higher price. PEF paid tax on the rental income and included the properties in its accounts.

Graham had three bank accounts which he used for business and personal purposes - PEF did not have its own bank account.

In 2008, Graham gave...