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Section 660 win for Qdos

by Susie Hughes at 11:35 07/02/06 (Section 660)

As the Arctic Systems continues to attract the attention of Section 660 watchers, Qdos Consulting can report a victory in another Section 660 case.

Keith Preece of Qdos writes: Qdos Consulting has won another Section 660A dispute with HM Revenue & Customs (HMRC). This is despite the uncertainty surrounding the Settlements Legislation - the so-called married couple's business tax - while the Revenue are in the process of petitioning the House of Lords for leave to appeal against the Court of Appeal judgement in the Arctic Systems case (Jones v Garnett). Qdos were successful in convincing the Revenue that even in cases where the Revenue firmly believes that there has been some sort of settlement between husband and wife, the arrangement is not necessarily bounteous. In this case, the wife purchased her shares from a third party, rather than from her husband, but the Revenue contended that the payment of substantial dividends to the wife, which secured a tax advantage for the couple, represented a settlement, as defined by Section 660A. Advertisement However, Qdos took the view that as the wife contributed substantially to the business, in terms of physical work on a day-to-day basis, even if the arrangement did constitute a settlement, the wife deserved her financial rewards, and so the payment of dividends was not bounteous. At one stage, the Revenue offered a compromise, suggesting that in view of the wife’s contribution to the business, only half of her dividend income should be assessable on the husband. However, Qdos stuck to its guns, pointing out that not only did the wife contribute to the business in terms of physical effort, her name was on the joint mortgage that had been used to finance the business and was secured on the marital home, demonstrating substantive financial risk on her part. The Revenue finally agreed with the Qdos interpretation and dropped the enquiry. This confirms that even if the Lords were to overturn the Court of Appeal decision, HM Revenue & Customs have to consider each case on its merits, and acknowledge that just because a husband might have “settled” money on his wife, it does not necessarily mean that the arrangement is caught by the Settlements Legislation. If you are concerned about the outcome of the appeal Qdos will be happy to discuss with you your circumstances and whether or not there is more that can be done. Qdos will carry out a risk assessment for you if you are unsure of your position. Please call 01455 850000 citing 'Shout99' for details. Keith Preece www.qdosconsulting.com Freelancers Outside IR35 Advertisement Qdos provides representation for freelancers in the event of a Section 660 or IR35 dispute through the insurance package 'Freelancers Outside IR35'. It costs £104.50 for a year's protection and is available immediately by ordering online here: Freelancers Outside IR35 (FO35). -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99.com 2006

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Section 660 win for Qdos	Susie Hughes - 7/02
Re: Section 660 win for Qdos	johnyh - 7/02

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