Tax Plus Blog - Residence & domicile

The first point to note is that the agreement is now in place having come into effect on 1 January 2013. It sets out measures for UK taxpayers with Swiss accounts both in relation to future and past UK tax liabilities. All UK resident individuals with Swiss accounts are affected by the agreement which provides for HMRC to tax these funds. From 1 January 2013 From now on, all UK account holders will either have to disclose a liability arising from the accounts each year or have tax withheld at source in relation to income and capital gains. In most cases individuals affected by...

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No new tax on homes.  A victory for the Chancellor on this point! There is no news yet on the proposed annual charge on high value residential properties in ‘envelopes’ and  we are waiting to see what is in the detail next week.  I am leading many enquires on this matter. Have you got a Swiss bank account? If so, do HMRC know about it? If not, well, time is running out. The government expects to receive £6bn over the next 5 years from previously undisclosed Swiss accounts. It will not be possible to hide...

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The official journal of the EU has recently published an opinion on tax and financial havens, i.e. tax havens.  I have to say the journal is worth reading, primarily for the rhetoric.  Whilst it is accepted that governments to do not normally like tax havens, some of the phraseology is interesting, for example: “2.1 Tax havens are places where senior executives of the world’s largest financial and industrial corporations mix with figures from the artistic or social ‘jet-set’, together with multi-millionaires who combine business with pleasure.  They all rub shoulders with somewhat...

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Since 22 March 2012, there is a 7% rate of Stamp Duty Land Tax (SDLT) which applies on the acquisition of a ‘high value’ residential property, where the cost exceeds £2 million. The SDLT rate is extended to 15% where the high value residential property is acquired by a “nonnatural” person. A “non-natural” person is a new term defined as a company, collective investment scheme or a partnership where one or more of the partners is a company. The driving force behind this change has very much been a move by the government to counteract the perceived avoidance...

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In this Summer edition of Tax Plus, we are delighted to bring you a selection of topical tax issues. Since our March 2012 Budget Special edition, we have seen further details from the government on pre-announced measures due to come into effect from April 2013. The most controversial of these is the plan to tax ownership of residential properties held within certain structures and we have prepared an article on this to explore the implications for you in greater detail. We also have articles on other government announcements in relation to placing additional PAYE obligations on certain companies and resurrecting the Statutory...

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This time last year we were disappointed with the deferral of the statutory residence test. Since then the omnishambles of the March 2012 budget, the huge amount of noise about pasties, charities and granny tax binned with recent furore re tax schemes meant the SRT has faded a little from the forefront of our minds but now it's back. The response document and the draft legislation was published on 21 June and in my view it was worth the wait. The legislation is in the format that we discussed last year and retains the three elements of test: Part A...

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Changes have been made to the tax agreement between the UK and Switzerland in respect of undisclosed Swiss bank accounts held by UK taxpayers. Under the revised terms, the upper limit of the one-off payment due on cash balances has been increased from 34% to 41%, while the lower limit has risen to 21% from 19%.        ...

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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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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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