S660 and two income earners

[Tex]

Not being married makes it even less likely that an s660a case could be stuck on you. So saying, remember the Arctic case is only considering the case where the shareholders are married, so anything drawn from that is inference only.

[DaveB]

For the purposes of this case does co-habitation carry the same legal standing as Marriage?

I'm not married but my partner and I have been together for a number of years. I'm considering making her a sharehold in the company with dividends etc as she already supports me by dong all my invoicing and other paperwork. Anyone know if this is an important distiction?

[boredsenseless]

Malvolio is correct, your question is not relevant in the current legislative framework. It may very well be that HMRC are not given leave to appeal to the HoL anyway. Three appeal court judges unanimously agreed and you have to have a better case to be granted an appeal than "I don't agree with the decision" (i.e. you have to demonstrate that there is a potential case that the decision was wrong in law).

It's dangerous ground to walk on when we try to apportion percentage amounts of work to avoid s660.

If s660 applies in reality HMRC could push it all the way to say that it still applies unless the split is completely equal in terms of fees generated.

Its also a completely stupid measure since you could quite easily have the case where a husband and wife work in a service company where the day rate of the husband is substantially lower than the wife's but the work that the wife is awarded is as a direct result of the lower work of the husband.

[Sergeant Apone]

Malvolio is correct, your question is not relevant in the current legislative framework. It may very well be that HMRC are not given leave to appeal to the HoL anyway. Three appeal court judges unanimously agreed and you have to have a better case to be granted an appeal than "I don't agree with the decision" (i.e. you have to demonstrate that there is a potential case that the decision was wrong in law).

[malvolio]

1) They don't appeal to me in the slightest

2) It doesn't matter - any such arrangement between man and wife is not bounteous. Joint income (in company terms) is not the issue, nor, since Arctic, is how you split the company profits between married joint-shareholders. The Revenue are using a legal process aimed to close a tax evasion scam perpetrated in the 1930's that has been irrelevant ever since 1991 (I think) when they brought in separate taxation of man and wife. It will take novel (and very complex) legislation to achieve the desired result, unless for some utterly incomprehensible reason the HoL overturn the Appeal Court judgement.

[Sergeant Apone]

Probably, but the law as stands makes no mention of this and it would require a test case to determine what, if any, level of fees earned would make this difference. Of course, such a test case will not happen for some time (and may never do so) as the law as currently stands says there is no s660 case to answer if your spouse in a non-fee earning shareholder

[SameOldStory]

In the opinion of the Appeal Court, none. Remember the current state of the law is that HMRC are wrong and Arctic are right.

1) They are appealling

2) Sorry if i wasn't clear, but what I wanted was not to argue about the bounty, or right to income, aspects of this. My question is this: does the generation of income for the company by both husband and wife not make the rest of the HMRC arguement irrelevant?

[Sergeant Apone]

How much would the spouse need to generate to invalidate the arguement?

In the opinion of the Appeal Court, none. Remember the current state of the law is that HMRC are wrong and Arctic are right.

[SameOldStory]

One of the things I notice in the S660 and Arctic case is that it seems to be relevant that none of the company's income is derived from work by the wife.

How much would the spouse need to generate to invalidate the arguement?