April 2017 Changes
As expected, the Chancellor has announced that the changes to the taxation of non-domiciliaries will proceed in April 2017. The changes to the taxation of UK residential properties held by offshore structures will also go ahead. Much will depend on the draft legislation which is being published on 5th December. If the draft legislation does not adequately answer many of the remaining questions (for example on how settlors of offshore trusts are charged to capital gains tax), there will be regret that the government has decided to proceed in April 2017. The government is in a hurry. Many feel that the government and taxpayers alike would have benefited by delaying the changes by a year or even six months.
The government has confirmed that it will legislate in Finance Bill 2017 on the disproportionate tax charges that can arise on life policies when policyholders make partial surrenders and assignments. The government has indicated that there will be a form of redress for taxpayers caught out by these rules. This is good news and addresses concerns we have raised previously. I have had to help two individuals recently who suffered huge tax bills as a result of these controversial rules. Without our professional advice, the taxpayers would have been stuck with tax rates in excess of 800%.
The end of the Spring Budget
The government has confirmed that from 2018 the 'Autumn Statement' will be scrapped and the main Budget will be moved from the Spring to Autumn. This is a sensible move, as the effect of having two main fiscal events each year can be unsettling. The Spring Budget is a British tradition, but holding the Budget half way through the tax year will allow a larger window to implement necessary changes. A Spring Budget means 6th April is never far away, which can put pressure on transactions to complete within a few weeks (for example where tax increases take effect on 6th April).
Disguised Remuneration Schemes
The Chancellor announced the government will continue to review 'disguised remuneration schemes'. The government will now look to tackle such schemes put in place by the self-employed. If the Treasury wish to successfully tackle such trusts, they need to work through...