Tax Avoidance

[John Mac]

I am a software developer in full time employment paying tax at 40%. My wife is a part time worker paying tax at 10%. I occasionally develop software at home and sell it to third parties. Can I avoid paying tax at 40% by giving the developed software to my wife who subsequently sells it on?

[taxman]

The position is not clear cut, however on the basis that you are trading as a software developer, and your profits are assessed as trading income, then one option could be to trade through a partnership. Your wife could then obtain some income to be taxed at the basic rate. It is likely to be easier to justify the payments to your wife through a partnership, as opposed to employing her as an employee.
Advice on the capital gains implications of this should be taken, however it is usually possible to bring in a new partner with no immediate capital gains tax cost.
Further details concerning the assets of the business and the circumstances of the software development/sale would be required to provide more detailed advice.
Regards