False start

I realise that HMRC is somewhat put out that their views on profit-shifting have not been sustained in the House of Lords. But the proposed changes to the law have not even been drafted yet.

In recent weeks I have encountered challenges on two enquiry cases from two different Inspectors (both from the same district) but both putting forward essentially the same position from HMRC. They suggest that the ability of a husband and wife partnership to vary the proportions in which profits and losses are shared between them from year to year is open to question. Specifically:

a) I have been asked for the basis of any change in the allocation of profits between partners and
b) it has been suggested that profit sharing should be in proportion to the input each partner makes to the operation of the business.

I stress that these are not cases where we are...