Year End Tax Review 2010/2011


Lead articles

Looking forward

This year, next year

Rate of change

Pension merry-go-round


Too much NIC

NIC and pensions

Company cars

Tax-free benefits

Childcare vouchers

Business - General

Time to incorporate?

Associated or not?

His and hers

Family bonus

Profit and loss

Show me the money

Can't pay, won't pay?

Turning back the clock

Business - VAT

Standard VAT or flat VAT?

VAT's up again

All Europeans now

A good start for VAT

Happy returns?


Top-up savings

Rainy day money

Capital Gains

Gains favoured

Splitting gains

A place in the country

Holiday lets reprieved


Family fortunes

Where there's a Will

Credits and debits

Benefit going

Piggy banks

Still trustworthy?


Penalty shoot-out

Going online

Paperwork, paperwork

Pay tax later

Opportunity knocks again


Give and save

Non-Domiciled People

Home and away


Interesting times

His and hers

Because husbands and wives are separately taxed, they can split certain types of income between them to better use their allowances and tax rates. HMRC may question this - for example, if one employs the other in a business and pays a salary, the salary can't be excessive for the duties involved. If one gives investments to the other, it has to be an "outright gift" of something which is not "wholly or mainly a right to income" - a proper capital asset.

In a House of Lords case in 2007, HMRC tried to show that the income from a "husband and wife company" should all be taxed on the husband. They lost, and immediately said they would change the rules so they would win next time. Their proposals were so complicated that they decided to delay any changes, and later Mr Darling announced that a recession is not the time to bring in a measure that would be likely to damage small businesses. Tax advisers say there is never a good time to bring in such a rule, but HMRC seem keen to revisit this at a later date! In opposition Mr Osborne seemed less keen on such an idea, but he is no doubt looking at all possible ways of reducing the budget deficit.

Meanwhile, husband-and-wife businesses have a breathing space in which the tax saving still works - within limits. It's still important to know what works under the current rules and what the taxman can already object to.

Action Point!
Do you jointly own a business with your spouse?