Contents
Don't leave it to chance
Family tax planning
Tax payback - tax credits
Pay rise for the other half?
Jam today, or jam tomorrow?
Pension payments and tax relief
Employee pensions
Children's pensions?
Borrowings and tax
Investment limits
Employee cars and fuel
Give generously and save tax
Capital gains
Capital losses
Second homes
Company or trade?
Inheritance tax
Children's savings?
Business tax
Two jobs = too much NIC?
Should VAT be flat?
Mutiny and bounty
One careful owner
A matter of trust
|
Husbands and wives are separately taxed, which means that they can split certain types of income between them to take better advantage of their personal allowances and tax rates. However, the Revenue can deny the benefit of this if they can show that there is an "arrangement" which involves "bounty" from one to the other, and it involves the transfer of something which is "wholly or mainly a right to income". In 2003, a Revenue announcement made it clear that they believe these rules apply to a great many businesses which are jointly owned by married couples, whether as companies or as partnerships. Most tax professionals believe that ordinary shares in a company, or the interest of a partner in a business, are more than "wholly or mainly a right to income", so the rules cannot apply. The Revenue have now won a tax case, on very specific facts, at the first level of appeal. The point will be argued through the courts, and may be the subject of changes to the law. All married couples who jointly own a business should be taking advice about what to put on their tax returns, whether the Revenue are likely to want to apply the rules to them, whether the Revenue would be likely to succeed, and how much the damage would be if they did. Unfortunately, this is likely to be an area of considerable uncertainty for some time to come, but at least you can know your exposure to the risks.
| ||||
© Bayar Hughes & Co., 2010.