TaxAdministrationTreasury urged to dump income shifting plan

Treasury urged to dump income shifting plan

The pressure is mounting on the Treasury to change the unpopular anti-avoidance legislation on family businesses

Opposition parties, small businesses and advisers have joined forces to
attack the ‘income shifting’ rules under controversial anti-avoidance
legislation for family-run businesses, said to impose a bureaucratic burden on
hundreds of thousands of companies.

But HM Treasury is not expected
to announce another climbdown following its concessions over capital gains tax
and non-domiciled residents. Its consultation on the proposals closed on Friday,
the Financial Times reports.

The measures which come into force in April are designed to stop a commonly
used form of tax planning, which enables couples to save thousands of pounds of
tax by shifting dividends from a business to a spouse or another family member
who pays a lower rate of tax.

Ministers are holding a series of meetings with business representatives, who
have urged it to announce concessions which could exempt very small businesses
from having to comply with the cumbersome record-keeping required by the
regulations.

Further reading:

Arctic rules ‘will wipe out red tape gains’

Read
story in the Financial Times

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