James Hay Welcomes Arctic Systems Decision

25 July 2007

by Neil MacGillivray

• House of Lords decision is great news for spousal companies
• Decision saves company with £100,000 turnover around £7835

James Hay, the UK's largest SIPP and Wrap provider, today welcomes the House of Lords decision of Jones v Garnett (Arctic Systems).

Neil MacGillivray, Head of Technical, James Hay said: -

"This is excellent news for husband and wife companies, and a boost to small business and entrepreneurship in the UK. The costs of the decision would have been very high for small businesses- around £7,835 extra tax for a spousal company with a turnover of £100,000 a year.

"The Lords have rejected HMRC's appeal on the grounds that although there was a settlement created for the purposes of section 660 ICTA 1988, it fell within the exemption for gifts between spouses. This means that where companies are owned jointly by married couples (including civil partners) the settlements legislation cannot apply and ends three years of uncertainty for family businesses".

Full details of the case and its history are attached and a copy of the full House of Lords judgement can be found at www.parliament.uk/lords.

Together, the James Hay SIPP and Wrap businesses have over £12 billion under administration. James Hay offers a dedicated Technical Support Unit to all its clients