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Issue:
4140
/
Categories:
Comment & Analysis
, Arctic Systems
, Jones v. Garnett
, Admin
, Income Tax
The Government has published draft legislation and guidance on income shifting. ANNE REDSTON provides an overview and suggests that a complete change of approach is required
Key points
- The background to the consultation document.
- Who will be affected and what are 'relevant arrangements'?
- The conditions and terminology.
- When will a tax advantage occur?
- A review of the Government's guidance.
Earlier this year HMRC were defeated in the Arctic Systems case. The Government immediately promised amending legislation and in December published a consultation document. In so doing it introduced a new verb into the tax lexicon.
Existing only in the plural form it conjugates as follows: 'We share rewards you split profits they shift income'.
The verb morphed quickly: in 2003 HMRC guidance talked about 'dividing' income; earlier this year the Pre-Budget Report called it 'income splitting' while the new consultation document is entitled 'income shifting'. The word 'shift' is of course...
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