Budget (4): Income shifting kept 'under review'

The Government intends to keep income shifting 'under review' although no immediate action is planned.

Last year, the Government intended to introduce legislation to prevent the common practice of sharing dividends between husband and wife or partners. However, its proposals met with widespread criticism for being unworkable. In last year's Budget, it stated its intention to shelve the proposals for the time being.

The Government has restated this position in this year's Budget, saying: "At the 2008 Pre-Budget Report action on income shifting was deferred and, consequently, no legislation will be brought forward in the Finance Bill. The Government will keep this issue under review."