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Where Taxpayers and Advisers Meet

Partnership Profit Allocation

IanRobe
Posts:1
Joined:Wed Aug 06, 2008 3:05 pm

Postby IanRobe » Mon Sep 22, 2003 11:03 am

I have been given to understand (anecdotally) that the IR are seeking to impose their own assessment of the proportion of Partnership Profit allocated to spouses; specifically in a current 'campaign'. Is there any published information on this or am I ill informed? Many Thanks, Ian

Nigel Lord
Posts:518
Joined:Wed Aug 06, 2008 2:18 pm

Postby Nigel Lord » Tue Sep 23, 2003 1:18 am

Ian

You have been correctly informed. The Revenue have interpreted the 'Settlement' provisions rather widely to attack arrangements where income is directed to connected persons who pay lower rates of tax - particularly, but not exclusively, spouses and minor children.

I refer you to Inland Revenue Tax Bulletin Issue 64 (see link) which outlines the Revenue's views.

http://www.inlandrevenue.gov.uk/bulletins/tb64.pdf

I would add that, for the most part, these contentions have not been tested through the courts (apart from Young v Scrutton and Young v Pearce (1996). We live in interesting times.

If you would like our firm to review your particular arrangements, please do not hesitate to contact us.

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk

bryn@rfm-direct.com
Posts:9
Joined:Wed Aug 06, 2008 3:05 pm

Postby bryn@rfm-direct.com » Wed Sep 24, 2003 9:07 am

Ian

Depending upon the size of your partnership's profits and your current and previous proportionments (and the reason for them), there may well be good reasons to increase your share dramatically.

Numerous ways exist to mitigate income tax liabilities, and the higher your income, the more tax that can be mitigated. This can be especially useful for self employed individuals as you have already made your payments on account.

If you would more info my details follow.

Bryn Walker
Silver Planet Advanced Tax Solutions
tel 01922 745540
e bryn@rfm-direct.com


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