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