Content
Brave New World
Business Not Pleasure
Summertime Blues
All That Glitters...
Casting The Net
Trust Gordon?
It Ain't Over...
One In The Eye
Keep Your Nose Clean
Foreign Affairs
When Is A Car...
Don't Walk Away
Avoiding, The Issue
Brown Is Anti-PC
VAT's Up Doc?
Fuel's Gold
An Age-old Question?
That's Unfair!
Year In Year Out
How Hard To Try?
It's A Rip-Off!
Outlaws Win
Show Some Restraint
Not Our Problem
They Cannot Be Serious?
Merry-Go-Round
Pension Disappointments
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Proverbially, it ain't over until the fat lady sings. Legally, it's over when the House of Lords have delivered a judgment. The case about husband and wife companies - "Arctic Systems", or Garnett v Jones - is going to the Lords after the taxpayer won in the Court of Appeal. The Revenue are continuing to argue that the company was an artificial arrangement to allow Mr Jones to take advantage of his wife's personal allowances and lower rates of taxation. She was paid dividends on a share that he let her subscribe for, while he did all the fee-earning work. HMRC believe that the law allows them to tax the income on him as arising under a "settlement" made by a husband for his wife. It's good news that the Court of Appeal held for the taxpayer, after the lower levels of appeal had supported the Revenue. Jointly owning and running a company is a routine arrangement for many married couples, and the idea that the Revenue could attack it - in every case, or in some cases - was disturbing. The Court of Appeal held that the Revenue would not be able to attack it at all, if there was an outright gift of ordinary shares. It was quite surprising that there was nothing on this in the Budget in March. Often HMRC get the rules changed when they lose a case. Perhaps they still think they can win, and the present rules are enough; perhaps they thought they could not come up with any better wording in the few months between the decision in December and the Budget in March. It's very hard to see how they can define what they want to attack without effectively reversing the independent taxation of husband and wife. If you are a married couple - or a registered civil partnership - running a business together, you should watch this space: we will keep you posted on what happens.  |
© Bayar Hughes & Co., 2010.