Section 660a of the Income and Corporation taxes Act 1988, also known as the "settlements legislation", is a little-known tax rule under which the Inland Revenue has recently attacked a number of PCG members.

The Revenue has argued that, under the settlements legislation, dividend income received by a non-fee-earning wife should be taxed as her husbands income, resulting in tax bills, backdated over 6 years, of up to £40,000.

PCG believes this application of S660A is legally wrong and quite unjustified. PCG has made representations at a senior level in the Revenue, and has written to the Paymaster General and to other Government departments about our concerns.

PCG is also supporting members under S660A investigation, and is preparing to take a case to the Special Commissioners.

For further information, see:

Section 660A advice

Section 660A http://www.pcg.org.uk/members/Section660TechnicalBriefing.html

Letter to Paymaster General

And see the PCG news pages and forums for developments.