The Gazette 1983

GAZETTE

JANUARY/FEBRUARY 1983

period of ownership but this requirement does not apply to the last 12 months of ownership. Summa r y /Conc l u s i on This situation is best summarised by comparing a hypothetical Mr. A's net income for 1982/83: (i) A married man living with his wife. (ii) A person separated under a separation and maintenance agreement which is not a Rule of

Court. (iii) A person separated under a maintenance agreement which is made a Rule of Court under Section 8 of the 1976 Act.

Assume while married Mr. A's cost of maintaining his wife is £5,000 per annum, and the same amount is

agreed for maintenance.

(iii)

(i)

.

(ii)

£

£ 15,000

£ 15,000

£

£ 15,000

£

A. Income

Less: Personal. Allowance P.A.Y.E. Allowance P.R.S.I. Allowance Mortgage Interest Maintenance

1,450 600 312 2,400 Nil

2,900 600 312 4,800 Nil

1,450 600 312 2,400 5,000

9,762

4,762

8,612

(iii)£10,238

Taxable Income

(ii)£5,238

(i)£ 6,388

Tax Payable

(iii)

(i)

(ii)

£1,000 at 25% £3,000 at 35% £1,238 at 45%

£2,000 at 25% £4,388 at 35%

250.00 1,050.00 557.10

£1,000 at 25% £3,000 at 35% £2,000 at 45% £2,000 at 55% £2,238 at 60%

500.00 1,535.80

250.00 1,050.00 900.00 1,100.00 1,342.80 4,642.80 767.00 5,000.00

1,857.10 767.00 5,000.00

Total Tax P.R.S.I. Maintenance of Spouse

2,035.80 767.00 5,000.00

Comment. . . (Continued from P.3) changes in Company Law arguing for heavier penalties for "fraudulent trading". Both "fraudulent" and "trading while insolvent" should be removed from the lexicon of Company Law. Each require too high a degree of proof and prosecutions can rarely be successfully mounted against those who are suspected of such activities. The recent Cork Report on Insolvency Law in the United Kingdom recommended the introduction of the concept of "wrongful trading" but on examination it appears that the Committee still proposes the retention of the words "with intent to defraud creditors" or carrying on business "for any fraudulent purpose". What is needed is not a retention of the unsatisfactory doctrine of fraud but the introduction of a new concept which will not require proof that the Defendant had any intent to defraud creditors but merely that his actions were carried on in a reckless manner without regard for the potential effects on creditors. The protection of limited liability is, as we have argued before, given too lightly and too cheaply. Companies should be required to pay substantial annual fees for the right to retain the protection of limited liability. Part of such revenue could be used to bring the operations of the Companies Office to an acceptable level. The rest couldi perhaps be put into a fund to assist the victims of dishonest trading by limited companies. •

(i)

(ii)

(iii)

B. Total Tax and Maintenance

£7,802.80 £7,624.10 £10,409.80

Net Disposal Income (A-B) £7,197.20 £7,375.90 £ 4,590.00 In the case of number (iii), Mr. A would not have sufficient income (£4,590.00) to meet his Mortgage Interest (£4,800). It is clear therefore that in the case of number (iii) Mr. A, in presenting evidence of his income to the Court, must present his net (after-tax) income, as below, so that the Court can properly assess what proportion of that net income should be ordered to be paid to Mrs. A for herself and any dependant children.

£ 15,000.00 (4,642.80) ( 767.00)

Gross Income of Mr. A Less Taxable (as above) Less P.R.S.I. Net disposable income of Mr. A 18

9,596.20