Profit splitting (Income shifting)

Future problems for family run businesses.

For a family run business the profits from the trade are usually split 50/50 or allocated to each spouse in the most tax efficient manner depending on their individual circumstances. The government‘s intention is to enforce legislation that requires profits to be split based on each spouses individual contribution to the business. The legislation was originally due to commence in April 2008 before being postponed to April 2009. Word coming out now is that the plans have been postponed indefinitely. However we would not be surprised if the government re work their initial proposals into something more workable to implement in the future.

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The content and advice is for information only. Last updated 26.07.2009.

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