Both, isn't it? I believe the 40 in the tire size is the aspect ratio, which would mean that 245/40 would be (nominally) 245mm wide, while the sidewall would be 245x40%. A 265/40 is going to be 265x40%. So, wider and taller?
I'm running 18x9s, 245/40, '95 spindles, and Fox struts on my...