HUSBAND & WIFE COMPANIES – CONSTRUCTIVE TRUSTS IN TAX
FEBRUARY 2ND 2011 | 03:45 TAGS:
In many cases where one spouse decides to set up or buy a company through which to earn a living, tax advice has meant that it is usual to involve the other spouse as an owner of some shares. The dividend income can then be split favourably between them to avoid one spouse paying unnecessary higher rates of income tax by being the sole recipient of any dividend income.
HMRC tried to apply the settlement code to such situations and despite their failure in the Arctic Systems case have recently tried again in the case of Patmore v HMRC [2010] UKFTT 334 [2010] WTLR 125.
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