Along with yesterday’s announcement that the implementation date for Making Tax Digital has been pushed back, H M Treasury also acknowledged that the uncertainty following the removal of the majority of clauses from the Finance Act 2017 to enable the Bill to be passed through Parliament before the snap election in June, is causing difficulty for advisers and their clients. A limited Finance Bill update confirmed a few things.
The Government has again confirmed that there has been no change in policy and it will reintroduce the withdrawn provisions, with the Finance Bill to be introduced as soon as possible after the summer recess. In the meantime for policies that have been announced as applying from the start of the 2017/18 tax year, and it intends will still apply for that tax year, it has published updated draft legislation.
The provisions affected are as follows:
- Reform of carried forward losses for corporation tax purposes and counteraction of avoidance arrangements
- Corporate interest restriction
- Deemed domicile: income tax and capital gains tax
- Employment income provided through third parties; introducing a new charge where there are disguised remuneration schemes
- Hybrid and other mismatches, in connection with tax mismatches which can occur when more than one tax jurisdictions apply, producing a contradictory treatment.
- Inheritance tax on overseas property representing UK residential property
- Substantial shareholding exemption changes
The publication of the draft clauses provides more certainty of the Government’s intentions, but until the Bill is debated in Parliament and passed as law, the position is not final. We understand that the Finance Act will be introduced as soon as possible after the summer recess, but with the MP returning for one week on 5 September before the conference season begins, and then returning again on 9 October, we are still some weeks away from a passed Finance Act that is law.
If you believe that any of the above provisions may affect you, and you wish to discuss this or the finance bill update in more detail, please do get in touch