Tax cases

Arctic blast

The high-profile TA 1988 s 660A appeal commonly known as Arctic Systems has been lost by the taxpayer. Under s 660A(1) 'income arising under a settlement during the life of the settlor shall be treated for all purposes of the Income Tax Acts as the income of the settlor and not as the income of any other person unless the income arises from property in which the settlor has no interest'.
The facts were that the taxpayer and his wife each owned one share in a company which earned profits by providing the taxpayer's personal services to clients. He took a relatively small salary from the company so that it could make profits. The profits were distributed as dividends equally between the husband and wife.
The Revenue argued that this was an arrangement within the settlement provisions the taxpayer was the...