BBC tax dodger. In March 2015 the press revealed that BBC presenter Jeremy Vine was using a tax-avoidance arrangement. As is often the case the reports were wide of the mark and, frankly, almost certainly inaccurate in their accusations.
What’s the plan? We can’t be sure what Mr Vine or his advisors had in mind, but what’s got the press hot under the collar is that his wife and daughter own shares in his company Jelly Vine Productions. What the reports we saw fail to mention is that several years back the Law Lords confirmed that share ownership by a spouse as a means of saving income tax was legitimate. Plus, as far as the daughter’s shares are concerned it’s unlikely these involve income tax avoidance but rather shrewd and entirely legitimate financial planning.
Spouse’s shares. Income received by Jelly Vine from Mr Vine’s activities could be diverted to his wife by paying her dividends on her shares in the company. If she pays tax at a lower rate than Mr Vine, income tax would be saved.
Daughter’s shares. Firstly, we can explain why we don’t think income tax avoidance is involved in the arrangement. Where a parent gives or buys shares in their company for their child who’s aged 18 or under, any income generated by those shares, i.e. dividends, will be taxed on the parent as if it were theirs. This is a well known anti-avoidance rule that Mr Vine’s advisors would be very familiar with.
Tax planning. The tax advantage Mr Vine’s advisors might have had in mind was to create a ready source of tax-efficient income when his daughter reaches 18.