Income shifting ― where are we now?

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

This guidance note looks at the how the settlement legislation may be applied to income shifting and how this has been viewed by the courts since the 2007 Arctic Systems case.

The settlement legislation is discussed in the Income shifting guidance note and it is suggested that the income shifting note would be a good starting point, before addressing the more specific comments on application of case law and HMRC guidance outlined below.

Overview

Arctic systems was a landmark case, and little substantive has happened in the years following. As this is still a key case, it is considered in detail below after a review of some more recent developments.

Some recent cases

There have been relatively few cases reaching the courts and each has turned on its own facts. They illustrate the likely challenges to income shifting arrangements and suggest a best approach to planning.

In Donovan and McLaren v HMRC, the issue was dividend wavers. Applying the guidelines in the Income shifting guidance note, it would come as no surprise to

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Personal Tax

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more

Employment Tax

Non-business expenses

Non-business expensesIntroductionIn order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.This guidance note deals with three separate issues. The

14 Jul 2020 12:16 | Produced by Tolley Read more

Owner-Managed Businesses

Interest on late paid tax

Interest on late paid taxIntroductionInterest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.Harmonised legislation was introduced in 2009 to:•set statutory

14 Jul 2020 12:00 | Produced by Tolley in association with Philip Rutherford Read more

UU��ֱ��