Stop crippling us, we're not tax dodgers

[lnoton]

Hello,

You may have read this on the Register homepage, these are the four conditions that would need to be set to determine whether income splitting is taking place under the new HMRC laws:

• individual one is party to, or has power over the relevant arrangements;
• individual one forgoes income and the foregone income is individual two's for the relevant tax year;
• individual one has the power to control the amount that is shifted; and
• the shifted income consists of distributions of a company or profits of a partnership.

Wondering how we all feel about this? Im not sure that would affect me or not actually.

My set up is
• Limited Company
• Me a director working as a full time contractor
• Partner as a director and secretary but working full time elsewhere and already in a higher tax bracket without taking consideration of any monies from the ltd company.

Heres the link: http://www.theregister.co.uk/2008/01...ctor_grumbles/

[Archangel]

Hello,

You may have read this on the Register homepage, these are the four conditions that would need to be set to determine whether income splitting is taking place under the new HMRC laws:

• individual one is party to, or has power over the relevant arrangements;
• individual one forgoes income and the foregone income is individual two's for the relevant tax year;
• individual one has the power to control the amount that is shifted; and
• the shifted income consists of distributions of a company or profits of a partnership.

Wondering how we all feel about this? Im not sure that would affect me or not actually.

My set up is
• Limited Company
• Me a director working as a full time contractor
• Partner as a director and secretary but working full time elsewhere and already in a higher tax bracket without taking consideration of any monies from the ltd company.

Heres the link: http://www.theregister.co.uk/2008/01...ctor_grumbles/

Although you will currently not be affected by the proposed income shifting legislation (like me, because partner is a higher rate taxpayer, so no tax would be saved by paying dividends to partner) your circumstances may change so that you would be affected in the future. Just say no anyway!

[Bluebird]

Although you will currently not be affected by the proposed income shifting legislation (like me, because partner is a higher rate taxpayer, so no tax would be saved by paying dividends to partner) your circumstances may change so that you would be affected in the future. Just say no anyway!

Correct.

At some point in the future if your partner no longer recieves a salary which takes her into the higher tax brackek - her tax allowances could not be used againt the dividends, which basically means she'd pay higher tax on the dividends even though she had no other income.