We have a situation where a company was set up to do a barn conversion into several homes. The final properties are now sold, which is going to give a fairly decent final profit in the final accounts (quarter of a million) split over 2 shareholders. They don't want to do a capital liquidation (they have good reason, so that's not in point here). So, we'll be paying dividends to distribute the post tax reserves. I've been reading up on PCRT and wonder whether we're still allowed to suggest that the dividends are made over 3 tax years, so as to avoid any of the shareholders going over £100k (to avoid high marginal tax rate etc) and so at least some of the dividends falls into basic rate band for each of the years. My worry is, though, is that there's no reason for doing that other than tax planning/reduction. Would deliberately spreading over 3 years be caught by the PCRT wording of "highly artificial or highly contrived" or indeed caught it be caught by the older GAAR? Or am I over-thinking this and spreading dividends over tax years would fall within allowed "normal" tax planning?
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I see nothing whatsoever wrong with what you are proposing, provided the dividends are properly declared and documented timeously.
Only someone like Richard Murphy or BBC Panorama's tax avoidance instigation team would think that.
I think the key difference here is that there are real dividends paid from a real company using real cash, i.e. something with economic substance. This is miles away from contrived schemes where celebrities sign a few boilerplate documents and claim to be used car dealers or film investors.
Thanks all, that's what I thought, but I was reading about the PCRT and it spooked me a bit. I'll go ahead as planned.