I've written at length before about the massive flaws in the the government's plan to crack down on what it's called "Income Shifting" - basically "husband and wife" businesses, where one spouse generates most of the income but the dividends are split with a spouse or partner so as to use their tax allowances.
Following the almost universally negative reaction to the plans, the Chancellor announced in the Budget yesterday that the introduction of the legislation has been postponed until 2009. It remains to be seen whether it will be implemented in its current form. At least for the next year, it's still legitimate to set up your business so that the allowances of both spouses are used.
As an aside, there have been two massive u-turns on small business tax recently - this, and the recent change of heart on CGT with the introduction of entrepreneurs' relief, following a similar outcry about the Chancellor's initial plans. It's hard enough for professional advisers to advise their clients accurately with the goalposts constantly shifting like this. How the unrepresented taxpayer is expected to get things right is beyond me.
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