For anyone wondering what has happened to what is known as the Arctic Systems case involving Mr & Mrs Jones which was won by the Revenue at the Special Commissioners and Court of Appeal but then won by the taxpayer at the High Court back in December last year, there's not been much progress since.

The outcome of the case may affect many husband and wife businesses around the country where taxable income is shifted to the spouse who only pays lower rate tax but has little involvement in the business.

The case is set to go to the House of Lords but is not listed on the schedule for business before Christmas. Given that even if held in January, the decision will not be immediate and so there is no chance of a decision before the filing deadline for 2005/06 tax returns on 31st January 2007, leaving the whole mess to continue for another year.

Expert advice should be sought for husband and wife businesses in this situation as to what to declare on their tax returns.

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