There is of course another, more sinister side to these apparently more benign, less focussed approaches - it means that anything you say is a prompted disclosure attracting higher penalties. if the enquiry was focussed on a particular subject matter, as it should be, then a disclosure of another matter could be unprompted. No longer, with this approach.
This exchange concentrates on CA requirements but of course don't forget our old friend s.12B TMA 1970 which sets out record requirements for tax purposes and says at 12B(3)
"In the case of a person carrying on a trade, profession or business alone or in partnership-
(a) the records required to be kept and preserved under subsection (1) [or (2A)] above shall include records of the following, namely-
(i) all amounts received and expended in the course of the trade, profession or business and the matters in respect of which the receipts and expenditure take place, and
(ii) in the case of a trade involving dealing in goods, all sales and purchases of goods made in the course of the trade".
The penalty for not having the necessary is up to £3k.
If the money is used to pay a joint liability that would otherwise fall to him to pay, then it is hard to see how the money is not 'applicable for the benefit of the settlor': s.625(1)(b). The language is deliberately very broad in its application.
It's 3 - the arrangement is a settlement and the parents are party to it (plus all the other adverse tax issues that have been mentioned by others). Remember too that the settlements legislation is a self assessment obligation so it'snot a case of waiting for HMRC to take the point - the client has to take a view when signing the return...
Let's go back to the law. PA 1890 s.2 says "Joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof", and of course that is right because partnership requires the existence of a business carried on in common with a view of profit, not mere ownership. So if there is a business there can be a partnership. HMRC always set the bar high but that is just their view. Business connotes activity, so any activity might qualify even if it does not clear HMRC's notional bar. It's a question of fact, but of course one should always have regard to case law on business such as Lord Fisher which give a better idea of the criteria to consider.
My answers
If these are intangibles and she is a related party to the transferee company you need to look carefully at s.845 et seqq CTA 2009...
There is of course another, more sinister side to these apparently more benign, less focussed approaches - it means that anything you say is a prompted disclosure attracting higher penalties. if the enquiry was focussed on a particular subject matter, as it should be, then a disclosure of another matter could be unprompted. No longer, with this approach.
This exchange concentrates on CA requirements but of course don't forget our old friend s.12B TMA 1970 which sets out record requirements for tax purposes and says at 12B(3)
"In the case of a person carrying on a trade, profession or business alone or in partnership-
(a) the records required to be kept and preserved under subsection (1) [or (2A)] above shall include records of the following, namely-
(i) all amounts received and expended in the course of the trade, profession or business and the matters in respect of which the receipts and expenditure take place, and
(ii) in the case of a trade involving dealing in goods, all sales and purchases of goods made in the course of the trade".
The penalty for not having the necessary is up to £3k.
If the money is used to pay a joint liability that would otherwise fall to him to pay, then it is hard to see how the money is not 'applicable for the benefit of the settlor': s.625(1)(b). The language is deliberately very broad in its application.
But not if the bills were joint bills... the burden of proof can be hard to discharge.
In fact I would say that s.624 etc ITTOIA 2005 applies to defeat this - it's an informal settlement.
It's 3 - the arrangement is a settlement and the parents are party to it (plus all the other adverse tax issues that have been mentioned by others). Remember too that the settlements legislation is a self assessment obligation so it'snot a case of waiting for HMRC to take the point - the client has to take a view when signing the return...
Let's go back to the law. PA 1890 s.2 says "Joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof", and of course that is right because partnership requires the existence of a business carried on in common with a view of profit, not mere ownership. So if there is a business there can be a partnership. HMRC always set the bar high but that is just their view. Business connotes activity, so any activity might qualify even if it does not clear HMRC's notional bar. It's a question of fact, but of course one should always have regard to case law on business such as Lord Fisher which give a better idea of the criteria to consider.