Update on Arctic Systems ' where are we now with settlements? By Nichola Ross Martin

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This is what one member asked the Any Answers forum last week, and as I am always receiving emails asking exactly the same thing, I though that it is about time to review the current state of affairs.

HMRC's appeal to the House of Lords

This is not listed on the Lords schedule of judicial business this side of Christmas. This means that even if the case were heard in January there is no chance of a decision before 31st January 2007.

2005/06 tax returns

The guidance remains the same as last year, so that the Revenue's published interpretation of what constitutes a settlement, in cases which are similar to Arctic, is not the right one. Each case must be determined on its merits, and the essential ingredients, if you are claiming that you case is similar enough to take this view, a...

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By Taxi
10th Oct 2006 13:25

HMRC did try this in Arctic, but as it was not one of their
original arguments, they were prevented from persuing it. As things transpired there has so far found to be no gift in that case anyhow.

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By Taxcon
10th Oct 2006 09:07

spouses benefitting
Actually, Nichola, I think that such an 'extreme' interpretation is not only what parliament meant but is the only possible interpretation that is policy-consistent with legislation whose plain and unequivocal purpose is to stop people ostensibly giving away their income but still geting their hands on the cash after they've side-stepped their tax bills! Thus those receiving such monies into joint accounts, to take a simple example, should be filling in their tax returns acordingly if the gift-to-spouse exemption is their only reason for saying the legislation does not apply to them. It is a great pity that this point has not been taken/argued in JvG; to give certainty to self-assessing taxpayers, unequivocal guidance on its currently all-embracing scope is required.

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