Tony wrote:

S660 will work - unfortunately. Be prepared to be stuffed. The first case
comes up soon but it is widely reckoned to go to the revenue - not fair, but
legal.

Not convinced they will make it stick. They only have one case in the
past to rely on, and that was for a very different circumstance. Their
argument seems to be based on the hypothesis that owning shares in a
business is an automatic right to income. In their one previous case
they were dealing with an odd situation involving preference shares that
did not carry any of the usual rights. Trying to apply that case law to
family firms owning "ordinary" shares which carry a whole package of
rights - but no automatic right to income - would seem to be stretching
a point. To try and back date this warped view of the world six years
and apply the legislation retrospectively (with penalties), when at no
time in the past have they given any indication that they may try this
interpretation, and all of the accounting profession were also unaware
that this line of thought might exist, seems to be taking the p***!

I guess we might find out soon when the case gets heard...

Having said that if they fail to make S660 stick there is nothing to
stop the introducing primary legislation to implement it in a way it
will work (rather than recycling decades old legislation). At least then
they would not be able to make it retrospective.

The tax on dividends has been brought in partly because of the abject
failure of IR35. If you consider yourself inside IR35 then Mr. Brown is
happy, if you have managed to place yourself outside then you'll get stuffed
by this.

Not convinced the IR view this new legislation as a replacement for IR35
- after all they did not repeal that. It seems that IR591 is just a
patch for the balls up they made with the 0% band.

--
Cheers,

John.

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