Arctic Systems-How do i best advise my client AT PRESENT?

Arctic Systems-How do i best advise my client...

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My question is simply how best to advise the client what to do at present.

I have said it could be challenged by the Revenue in the light of the current case.

Is there anything else i should do to cover my back!!

Many Thanks for any help
david

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By Sherlock
22nd Aug 2005 11:33

Very difficult
As you no doubt know Arctic Systems is being appealed further, so that we are still 'up in the air'. I have reviewed the case in Newthwire No. 84 and made some suggestions. The first is that you must make sure that your PI insurance is well up to date! In the case that you mention it is important that a realistic salary is paid by the company to the husband. Beyond that one cannot advise further without receiving full details of the company, its directors, shareholdings, profits made, salaries and dividends.

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By User deleted
23rd Aug 2005 21:15

You really need to give more information about the
company before any advice can be given. If you are dealing with a company similar to Arctic, then wait and see. If you do not know, read RI 268 and check out all the examples given of what HMRC thinks are settlements.
Check out the settlement section of my website too.
www.rossmartin.co.uk

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By User deleted
23rd Aug 2005 20:26

Assuming that we are talking about

a private limited company you need to ensure that the shareholder actually has the power to do this and that any requirements in the articles etc are complied with.

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By NeilW
23rd Aug 2005 16:36

No guarantees
Surely the advice should be that the client could gift the shares and redirect the dividend income, but that such a move is not without the risk of the Revenue attempting redirecting the dividends back onto the client and asking for the 20% tax. Should that happen then the client would then have to prove that 660A doesn't apply to get the benefit.

The risk of it happening is anybody's guess.

NeilW

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By User deleted
23rd Aug 2005 15:38

Does this help?
Company owned as follows:

X 51%
Y 39%
Z 10%

They are all directors and as well as dividend share, Z gets commercial rate of salary £30000. Dividend share is usually £40000 per annum

Z whats to gift his wife half of his shares. The wife earns 5K per annum out of the company.

Many Thanks for any help

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