In the Upper Tribunal, Sharon Clipperton and Steven Lloyd appealed against an FTT decision relating to a dividend replacement scheme that they had joined in 2012.

The appellants had used a tax planning arrangement designed to enable dividends to be received by shareholders tax-free.

HMRC disputed the arrangement and said that income tax was chargeable on 2011/12 earnings from arrangements involving their company Winn & Co (Yorkshire) Ltd, a firm of accountants, where they were the sole directors and shareholders.