Tax Plus Blog -

On 6 December it was announced that the UK is planning to change two key anti-avoidance provisions: the rules governing transfers of assets abroad and the attribution of gains made by non-resident companies. Apparently proposals will be published for consultation around the time of Budget 2012 with a view to enactment in the 2013 Finance Bill. The reason for this is that, in February 2011, the EC announced that the existing UK legislation infringed the EU Treaty. The issue is that the law discriminates by taxing the shareholders of a non-UK resident company on the income and gains made by that company...

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The Government has issued the draft Finance Bill today with a number of other documents and announcements. A key – and somewhat disappointing announcement is that the new statutory residence test will not now come in to force until 2013/14 – a year later than we had hoped. The simplifications and changes to encourage non doms to invest in the UK will be enacted for 2012/13 as planned. We will be reviewing all the proposals over the next few days and will issue updated information as soon as possible. If you have any questions in the meantime please don’t hesitate...

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The Basics The UK Swiss tax agreement will affect individuals with a bank account, trust or company in Switzerland. Bank accounts open on 31 December 2010 and 31 May 2013 and held by individual UK tax payers will be subject to a one-off levy of between 19% -34% depending on the length of time the assets have been located in Switzerland. This is in lieu of the historic tax liabilities, interest and penalties that may apply. Note that no account is taken of legitimate, non taxable funds in the account. Withholding tax on income and gains derived from Swiss bank accounts of 48% and 27% respectively will...

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The twittersphere contains reports that business property relief for IHT on unquoted stocks and shares may be removed in the next budget. This area has long been recognised as a generous relief but it is not clear whether this is merely the latest rumour or if there is any substance to the story. Certainly it does not take a huge change in the legislation to re focus the relief onto owner managed businesses rather than AIM portfolios of investments. November 29 is probably the earliest date for any announcement but it is worth considering now if there is anything to be...

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Accountancy Age is reporting on Twitter that Mr Gaines Cooper has lost in the Supreme Court. The saga which has continued for a very long time now has come to an end with the Court finding that the rules as expressed in IR20 were followed correctly. The judgement was not unanimous and the dissenting judge argued that the necessity for a clean break should have been clearly expressed. We hope that the proposed statutory residence test will leave this case as historical interest only but if there are no transitional rules in the draft legislation (expected 6 December) then Gaines Cooper...

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We keenly awaited the return of NS&I indexed linked certificates and quickly alerted clients to their relaunch in May this year, suggesting where possible they consider the maximum investment of £15,000 per person. Being the only savings vehicle in the UK able to guarantee a tax-free return greater than the rate of inflation - with the capital being 100% backed by the government - it is no surprise that they have been hugely popular with over 520,000 people investing to date. Now just four months later, NS&I confirmed this week that both fixed interest and index-linked certificates are...

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It is reported that the remittance basis charge is accepted as being relievable against US tax. Since its introduction in 2008, it was unclear whether the remittance basis charge of £30,000 was creditable in the US meaning that many US taxpayers felt unable to claim the remittance basis in the UK at all. This will become even more important with the proposed increase in the charge to £50,000 after 12 years of UK residence to take effect from 6 April 2012. Going forward we should have some greater flexibility in how to arrange UK/US taxpayers affairs. Lisa Spearman is a tax adviser and...

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The framework for the long awaited statutory residence test is set out in the consultation document issued on Friday 17 June. In a different document of the same day, the proposed changes to the remittance basis rules were also announced. I am pleased to say that both documents are clear and straightforward.  So what are the main points? The residence test is to be comprised of three parts: Part A Conclusive Non Residence: Part B Conclusive residence and Part C which operates as a tie breaker. The test relies on only four factors other than days of presence which...

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The Treasury will be releasing its forthcoming consultations on 'Statutory residence test' and 'Non-domicile taxation' on Friday 17 June 2011. Our private client partner, Lisa Spearman will be blogging her views on the consultations early next week. Lisa is an acknowledged expert on the tax consequences of offshore trusts, and residence and domicile issues and leads Mercer & Hole’s specialist team that focuses on our non UK domiciled clients. She is Chairman of the ICAEW Tax Faculty’s, Private Client Committee and within that leads the working party on non domicile and residence matters. Lisa Spearman is a tax...

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HMRC has announced that the 2010/11 forms P11D, that are due for submission by 5 July, cannot be posted/delivered to your local office. Instead all paper forms have to be sent to a dedicated post room at: HMRC NIC&EO P11D Support Team Tynemouth House Room BP8019 Benton Park View Longbenton Newcastle Upon Tyne NE98 1ZZ You will need to make sure forms are completed and posted to arrive in Newcastle by the submission deadline. Penalties are likely to be charged on late returns. Cathy Corns is a tax adviser and a partner at Mercer & Hole. The...

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