AS IHT Trust Simplification

Wed 03 Dec 2014

Single Trust NRB abandoned but IHT simplification is not proving so simple

Despite going through three stages of consultation HMRC have still yet to explain how they will simplify the existing complex system for taxing capital value held in trusts.

Hidden in the Autumn Statement was a short paragraph confirming that one ‘Settlement Nil Rate Band’ to be shared across all trusts set up by the same person will no longer be introduced. This was proposed in the last consultation launched in June as part of the proposals to make the IHT charges on trusts fairer.

The Government are still proposing to target IHT avoidance through using multiple trusts and they intend to still somehow simplify the current well established, but complex, method of calculating IHT due by trusts. Hopefully the detail in the Finance Bill will explain further, will this be followed by consultation document 4?

No Settlement NRB for trusts but will simplification still mean a flat rate IHT charge of 6%? #AS2104

Travel & Subsistence – consultation to follow

The Government have committed to a full public consultation on the framework for new travel and subsistence rules. The consultation on changes to the tax relief for travel and subsistence expenses is likely to affect all employers. The Government recognises that the rules on travel and subsistence are complex and out of date. The present […]

Corporation tax rate-setting powers may be devolved to Northern Ireland

Following on from the debate on Scottish independence, is the Government keeping its promise to look at greater devolution of powers across the constituent parts of the United Kingdom? The Republic of Ireland’s much lower company tax rate makes it the winner in the cross border tax competition with Northern Ireland. To help redress the […]

Autumn statement 2014: more than an awards ceremony?

George Osborne delivers the Coalition’s final Autumn Statement in the House of Commons on 3 December. We reckon he’ll use this opportunity to remind us of the economic achievements of the Coalition, but will there be carrots promising reductions in future tax bills? By good fortune or good judgment, the UK’s economic performance is top […]

SDLT on residential property overhauled overnight

A major change announced at today’s Autumn statement is an overhaul of the stamp duty land tax rates that apply to residential purchases. This introduces a marginal system with each SDLT rate payable only the portion of purchase price falling within each rate band, instead of the current ‘slab’ system. Set out below are the […]

ISAs: new exemption for widows as well as raised limit

Not only did the Chancellor increase the ISA limit from £15,000 to £15,240 from April 2015, he also announced that with immediate effect, if an ISA saver in a marriage or civil partnership dies, their spouse or civil partner will be able to inherit their ISA wrapper and keep the ISA tax advantages. The Treasury […]

Non-residents keep allowances for now but will they pay more UK tax in the long run?

The Chancellor has recognised that the proposed abolition of the UK personal allowance to non-UK residents is complex and the Government will not proceed without further consultation. This does not mean that the topic will not be revisited after the General Election but no changes will take effect before April 2017. The purposes of withdrawing […]

Tackling the tax avoiders

The Autumn Statement shows a continued determination to make tax avoidance less and less attractive with a new dedicated taskforce to tackle the problem. This will apply to all those – whether individuals, partnerships or companies – that may have sought to shelter their taxable income through tax avoidance, including those who have invested in […]

Direct Recovery of Debts – HMRC listen to the concerns

HMRC goes ahead with the introduction of Direct Recovery of Debts but introduces new measures to safeguards taxpayers. This measure should bring some small degree of comfort to those who owe money to HMRC and were concerned at the proposal that would allow HMRC direct access to their bank accounts. The initial proposal for the […]

Clamp down on avoidance by multinational groups

The Chancellor finally gave some more detail on his promise to tackle the techniques used by multinationals groups to shift profits offshore. This change will impact multinational groups like those which have been very publicly named and shamed in the press and by the Public Accounts Committee. However, it might also affect those groups whose […]

Timing of tax deductions for late paid interest

What started as an anti-avoidance measure has been exploited by companies to their benefit. Consequently the Government is now changing the rules. This affects UK companies which have borrowed funds from connected companies based in tax havens, where the borrower has deferred payment of interest in order to optimise the timing for which corporation tax […]

AS Loss relief restrictions

Immediate restrictions on loss relief from tax avoidance arrangements Currently, losses arising from quite a variety of transactions (including post cessation transactions, patents, know how and accrued income to name a few) can be offset against other miscellaneous income in the same year or carried forward and relieved in future years. Relief for these “miscellaneous” […]

AS non-doms

Non-UK domiciled individuals to pay more to keep the ability to pay UK tax when they want Individuals who are resident in the UK for a number of years but who are not UK domiciled can elect to pay an annual charge so that they only pay UK tax on income and gains as and […]

Extending social Investment tax relief

Subject to EU approval the Government intends to increase the investment limits for SITR and widen the range of qualifying vehicles, such as small-scale community farms and horticultural entities. The provisions will affect social enterprises: businesses set up to carry out business activities and specific projects on a not-for profit basis. In its present form […]

HMRC seek consultation on salary sacrifice arrangements on reimbursed business expenses

The Government is proposing to stop tax relief advantages being claimed by workers engaged by ‘Umbrella’ companies on reimbursed business expenses that are not generally available to other workers. This will affect those workers who provide their services via employment intermediaries (umbrella companies) and who have put in place ‘salary sacrifice’ arrangements in order reduce […]

Bank and Building Society Loss Relief Restriction

All banks and building societies will be taxpaying – even those with tax losses A new loss relief restriction will require banks with brought forward tax losses, to restart contributing to the exchequer. They will suffer a real cash flow cost and there are accounting issues for deferred tax asset balances being carried on bank […]

More consultations due on Marketed Avoidance Scheme deterrence

Despite predictions of Autumn Statement announcements on the latest measures to deter marketed avoidance of schemes, HMRC seem to be out of ideas on how to effectively tackle the source and the end user. So it’s back to the consultation drawing board on these high profile measures. These will affect individuals and companies who have […]

Entrepreneurs’ relief mixed blessings: relief extended to reinvestment in EIS and SITR; sale of goodwill to connected companies disqualified

The Autumn Statement speech seemed very positive for privately owned businesses – with talk of strengthening entrepreneurial reliefs, improved innovation tax breaks and simplification measures. The post Speech reality was a little less rosy although, on balance, ‎still good news for most entrepreneurial business. This benefits entrepreneurs who sell their businesses and accept further risk by […]

Employers of carers to enjoy the £2,000 NIC employment allowance

The current £2,000 Employment Allowance does not cover those employers engaging individuals such as nannies, housekeepers and carers where these duties are primarily carried out in the family home. This will benefit people who employ carers in the family home who will now be able to take advantage of this exemption and benefit from reducing […]

Non-residents keep allowances for now but will they pay more UK tax in the long run?

New benefit in kind exemptions & simplification

The Office for Tax Simplification (OTS) recommendations to exempt trivial benefits and reimbursed expenses as well as abolishing the obsolete £8,500 dividing line on benefits in kind and expenses will be acted on. Employers are mainly likely to welcome most of the changes which will reduce compliance burdens overall. Employees may see simpler P11Ds. From […]

NIC abolished for apprentices under 25

From April 2016 employers who have apprentices aged 25 years and under on their payroll will be able to claim exemption from employers NIC on the cost of the apprentices salary up to the upper earnings limit. Based upon the rates and thresholds for 2015/16 you could pay an apprentice a salary of up to […]

Autumn Statement 2014 – CIS

OTS Construction Industry Scheme (CIS) improvements will aim to reduce complexity. The Government will implement a number of improvements to the CIS which will be announced shortly. The CIS changes will be welcomed in both the construction sector and non-construction businesses that perform construction operations. We will have to wait for the details to be […]

Can pay, won’t pay? Curtain-up late on Direct Recovery of Debts

One topic we expected to hear more about at the Autumn Statement was the controversial proposals for HMRC to raid the bank accounts of taxpayers who can pay the tax they owe but refuse to do so, despite numerous requests from HMRC. A storm of protest met the original proposals, known as Direct Recovery of […]

AS IHT Trust Simplification

AS IHT Trust Simplification

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