The recent appointment of a new auditor by the Scottish National Party evoked a public outcry when the media reported that a subsidiary of the newly appointed audit firm was marketing a scheme to divert income from parents to their minor children to avoid income tax on dividends used to fund private school fees. It has since became apparent that variants of this school fee planning arrangement had been marketed widely by an array of advisers, including accountants, corporate solicitors and financial advisers, for many years. Acting with uncharacteristic fervour, HMRC published Spotlight 62 (‘Dividend diversion scheme used to fund education fees’), less than one month after the media exposé. The publication of Spotlight 62 is a reminder that the settlements legislation can apply widely, particularly where dividends are paid to minor children, thus demanding a detailed consideration when advising multi-generational family companies.
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The recent appointment of a new auditor by the Scottish National Party evoked a public outcry when the media reported that a subsidiary of the newly appointed audit firm was marketing a scheme to divert income from parents to their minor children to avoid income tax on dividends used to fund private school fees. It has since became apparent that variants of this school fee planning arrangement had been marketed widely by an array of advisers, including accountants, corporate solicitors and financial advisers, for many years. Acting with uncharacteristic fervour, HMRC published Spotlight 62 (‘Dividend diversion scheme used to fund education fees’), less than one month after the media exposé. The publication of Spotlight 62 is a reminder that the settlements legislation can apply widely, particularly where dividends are paid to minor children, thus demanding a detailed consideration when advising multi-generational family companies.
If you are not a subscriber, subscribe now to read this content.
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