Despite HM Revenue & Customs case against husband and wife IT firm Arctic Systems going all the way to the House of Lords, the tax system still favours married couples, mainly due to the capital gains tax and inheritance tax benefits their status brings, a new report by the Institute for Fiscal Studies has claimed

Entitled Taxation of the Family, the IFS report made this claim, while at the same time saying HMRC was attempting to confront couples in business with anti-avoidance rules, thus imposing ‘greater limitations’ on their tax planning.

It further warned that the increasing tendency of ‘HMRC to seek to counter what it considers unacceptable family planning by married couples is causing the tax advantages of marriage to be eroded, at least for those owning their own companies’.

The IFS said HMRC’s appeal to The House of Lords to rule against the IT consultancy has made family firms ‘wary’.

Further reading:

Arctic row 'will happen again'

Arctic Systems hearing ends one day early

HMRC: Arctic set-up is 'voluntary joint taxation'