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Tax Day: points for private client practitioners

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Tuesday was the UK’s second so-called ‘Tax Day’ and, as promised earlier this month, the government released various documents, responses to consultations and calls for evidence on a wide range of topics, ranging from from small brewers relief and landfill tax to general issues. tax policy, collection and enforcement.

Here are some initial points to note for private client practitioners.

  • The government has taken into consideration the Office of Tax Simplification (OTS) review of inheritance tax design (as well as recent reports from the Organization for Economic Co-operation and Development (OECD) and the All-Party Parliamentary Group on inheritance and intergenerational Equity) and confirmed that it will not make any of the suggested changes. This confirmation provides welcome clarity for practitioners, at least for now.
  • The government has also reviewed the OTS ‘Capital Gains Tax (CGT) review and, while accepting some of the more technical recommendations, will not make any fundamental changes. Contrary to the government’s response on inheritance tax, the government noted that it will “keep the CGT system under review to ensure that it is simple and efficient” and highlights some areas for further consideration. including, for example, a review of the relief of business investment regimes. .
  • Technical changes include:
    • the extension of the reporting and payment deadline for CGT charges related to UK real estate from 30 to 60 days (which was announced as part of the autumn budget); and
    • extend the “no gain or loss” window on separation to the later of the following dates: (i) the end of the tax year at least two years after the separation event; or (ii) any reasonable period of time fixed for the transfer of assets in accordance with a court approved financial arrangement or equivalent proceeding in Scotland. It will make life much easier when transferring property after divorce. The government will consult on the details of this proposed change next year.
  • The government has confirmed that the Taxable Gains Tax Act 1992 will be amended to make CGT relief available to Scottish limited liability companies and partnerships in an interest exchange on land jointly held by their members or partners (which is the current position for partnerships under English law).
  • The government has now released a technical consultation and draft regulations explaining how it will implement the OECD Model Mandatory Disclosure Rules. These will continue a form of cross-border reporting regime, similar to the existing DAC6 regime (which applies across the EU but has also been implemented by the UK), for cases where, for example, provisions and structures are in place to circumvent the Common Reporting Standard.
  • The government has established an HM Revenue and Customs (HMRC) Stakeholder Forum to discuss how to tackle overseas tax non-compliance as part of HMRC’s “No Safe Havens” strategy. This is clearly still an area where HMRC hopes to increase its tax levies.
  • The government has released a consultation on Stamp Duty Land Tax (SDLT) relief for mixed-use and multiple-home purchases because the government believes these are being exploited by some buyers. The proposals include an allocation basis for charging LTDS in relation to mixed-use properties and restricting the multi-unit relief to situations in which the units are purchased for “qualifying commercial use”.
  • The government has considered the possibility of collecting income tax more regularly for debts that are currently part of the self-assessment process. While there is no change in this legislature, more regular income tax collection remains the government’s ‘long-term ambition’ and HMRC will conduct a proof-of-concept pilot program to see whether changes are feasible.
  • The government will consult on how to formalize an existing concession that seeks to eliminate income tax for directors and personal representatives when their only source of income is interest on savings which gives rise to tax payable less than £ 100. Hopefully, HMRC could be persuaded to include all income in relief and not just savings interest.

As part of Tax Administration and Maintenance Day, the government presented more details on its work to put in place a modern, simple and efficient tax system – which helps taxpayers get their tax right from the first cut.

www.gov.uk / …