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Marriage and spoilt children

DAVID WHISCOMBE asks why HMRC chose a married couple as their 'test case' on the application of the settlements legislation.

IT IS MARRIAGE that lies at the heart of the Arctic Systems (Jones v Garnett) debate. Or rather the equivocal confused and contradictory approach that tax law has to marriage — reflecting perhaps the varying attitudes to marriage that exist in twenty-first century Britain. And the proper legislative response to Arctic Systems (if indeed any is appropriate) warrants something better than HMRC's immediate reaction like a spoilt child losing at snakes and ladders that the rules must be changed.
Under the present law the settlements legislation operates differently according to whether the settlor and the beneficiary are or are not married (and throughout this note I shall use 'married' as short-hand for 'married or a partner in a civil partnership'). A settlement made on an adult who is not the settlor's spouse is caught by ITTOIA 2005 s 624 (such...

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