Content
Winter Of Discontent
CGT Winners
CGT Losers
Shifty Business
Anything To Declare?
Long Arm Of The Law
Irreplaceable You
Earn As You Pay
Ask Questions Later
Capital Ideas
ISA ISA ISA
Referee!
Go Green
VAT Or No VAT?
Taking The Register
Close Encounters
May Contain Nuts
Going Concern
Ancient History
Business And Pleasure
Do Your Duty
Know Your Rights
Time To Go?
Passing The Buck
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Last year the House of Lords ruled that a married couple were entitled to split the ownership of a business between them and enjoy the tax benefit of paying dividends to both, even though one was much more involved in the business than the other. Celebrations for everyone who has been worrying about this since the Revenue first took up the argument in 2003... ...except that the Revenue haven't given up. They have put out for "consultation" a new set of rules which would cancel what they see as the unacceptable benefit of this tax planning, which they call "income shifting". We hope that they really mean to consult and take people's comments into account, because the proposals would create a great deal of difficulty - as well as higher tax bills - for small businesses. The idea is that income that one person could have reasonably expected to receive on a commercial basis, which is diverted to someone else by using a company or partnership, will be taxed on the person who could have received it in the first place. The Revenue do not seem to recognise that this is not clear cut, and as a result it will be very difficult to say how much - if any - income should be subject to the rules. Where a business is run by two people together they will almost always make different contributions which may be hard to value. How can you say for certain what each person deserves, when a business is being jointly run? The new rules are supposed to apply in April this year, which doesn't leave a great deal of time for any responses to the consultation to be taken into account. Maybe that tells us something. We can only hope for some sensible revisions in the Budget - but if you are running a business jointly with someone you are close to (they have now gone beyond just husbands and wives), you will need to keep an eye on how this might affect you. We will be ready to advise you - when the Chancellor tells us what the rules will be!  |