Arctic Systems - More on Husband & Wife Companies

August 2005

At the risk of repeating ourselves, and as an appeal in this case has now commenced, we need to give thought to what can be done in the interim to forestall any possible problems arising from returns made by companies owned jointly by husband and wife (or those who have entered into a civil partnership).

Things we can do include:-
1. review previous tax returns to see if dividends were split adequately, taking into account the judgements made so far in this case.
2. deflecting the Revenue's interest by paying fair market salaries to each spouse regarding their respective duties. How this is calculated, however, is a difficult question which we can discuss with you.
3. adjusting shareholdings to reflect the real input of each partner, a position much less likely to be challenged by the Revenue.

If you are worried about your own company's returns, pick up the phone!