Withdrawal of transitional relief on investment growth

Titel

Publicatiedatum

28/07/2016

Categorie

Payroll

Bron

HM Revenue & Customs

Aard

Nummer

Samenvatting

HMRC Spotlights identify specific tax avoidance schemes of which HMRC has become aware and that they consider are not likely to have the legal effect desired by those thinking of using them. According to HMRC, the Spotlights series is designed to help taxpayers avoid unwittingly entering into arrangements that HMRC are likely to treat as tax avoidance.

In the Spotlights series HMRC:

Provides some advice on tax planning to be wary of, listing some indicators that HMRC sees as suggesting that a scheme may involve tax avoidance and which it is likely to investigate.
Identifies specific schemes which, in HMRC's view, are not likely to deliver the tax savings advertised. Where HMRC sees such schemes being used, subject to the particular facts, they will make a challenge and seek to ensure full payment of the correct tax payable on the due date.

HMRC has recently added a new Spotlight to its growing list. Spotlight 31 concerns the government’s plan to change the date for the withdrawal of transitional relief on investment growth. The withdrawal of this relief is part of the government’s plans to tackle the use of disguised remuneration avoidance schemes such as Employee Benefit Trusts (EBTs) and contractor loans.

The withdrawal of the relief is to be delayed to give taxpayers more time to reach a settlement with HMRC. In order to give this extension the proper legal footing, an amendment to Finance Bill 2016 will extend the date for the withdrawal of transitional relief from 30 November 2016 to 31 March 2017.

Spotlight 31: change of date for withdrawal of transitional relief on investment growth

Published 20 July 2016

Contents

The government intends to extend the date for withdrawal of transitional relief on investment growth currently available under paragraph 59 of Schedule 2 to Finance Act 2011 (Para 59) from 30 November 2016 to 31 March 2017.

The withdrawal of the relief was announced at Budget on 16 March 2016, as part of the package of changes to tackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these schemes pay their fair share of tax and National Insurance contributions. More information can be found in the Technical note.

The transitional relief was intended to work alongside the EBT settlement opportunity, which closed on 31 March 2015.

Customers, their advisers and promoters should be aware that HM Revenue and Customs (HMRC) continues to believe that disguised remuneration schemes don’t work, and will challenge these rigorously.

The government wants to ensure all users of disguised remuneration schemes have the opportunity to settle with HMRC before the transitional relief in Para 59 is withdrawn. Therefore an amendment to Finance Bill 2016 has been tabled to extend the date for the withdrawal to 31 March 2017. The amendment, once agreed by Parliament, will mean that users who want to benefit from the transitional relief on investment growth in Para 59 must have settled on or before 31 March 2017.

If you or your clients have used or are using a disguised remuneration scheme you should seriously consider settling your tax affairs and talk to HMRC about how to do this. If you are already speaking to someone at HMRC about your use of a disguised remuneration scheme you should contact them in the first instance. If you don’t have a contact, you should email: ca.admin@hmrc.gsi.gov.uk and someone will get back to you very quickly.