Inland Revenue Commissioners v Pearson
Income Tax – Tax-free dividend – Amount of income for purposes of sur-tax – Finance Act
1931 (c 28), s 7(2).
A cheque for dividends declared upon certain shares held by a tax-payer was accompanied by
a letter stating that the company had not exercised its statutory but optional right to deduct
income tax when paying these dividends and that therefore the dividends were being paid in
full and stating the amount that would have been deducted if the deduction had been made. In
another case a cheque for dividends declared upon certain shares held by a tax-payer was
accompanied by a warrant which stated: “Gross dividend … £3,150. Amount actually paid,
£3,150