‘Loopholes are being closed with immediate effect,’ the chancellor announced
Several new measures to tackle tax avoidance will take effect from today, the government has announced.
George Osborne said: ‘Hundreds of millions of pounds of tax loopholes are being closed with immediate effect, and we are investigating abusive use of partnerships.’
Michael Wistow, head of tax at Berwin Leighton Paisner, said: ‘Paradoxically the “loopholes” that so infuriate the chancellor have been created by excessive tinkering and changes to the tax regime by successive governments. Some of these so-called “loopholes” were called incentives when they were introduced.’
Draft legislation published today includes measures to counter schemes that aim to reduce corporation tax liability through ‘asymmetric tax treatment of loans or derivatives (tax mismatch schemes), including, although not limited to, schemes involving companies which are members of a partnership’.
David Gauke, the exchequer secretary, said in a written ministerial statement: ‘Due to the repeated use of partnerships and similar collective structures in tax avoidance schemes, the government will be considering the area of the taxation of partnerships and similar structures as part of its review of high risk areas of the tax code.’
Legislation is also being introduced to block:
‘schemes that use property return swaps to convert capital losses within a group into income losses, and that use the legislation to generate capital gains which are not in proportion to those actually arising from the swap contract’; and
‘schemes involving stock lending arrangements [in which] a company lends stock, and instead of receiving a manufactured payment which is taxable, for example as a trade receipt, receives value in some other non-taxable form’.
Income tax relief for non-trade payments of patent royalties is to be abolished, to counter an avoidance scheme exploiting the relief and to ‘simplify the tax code’.
Bank levy
Gauke announced that legislation to take effect from 1 January 2013 will ‘put beyond doubt that foreign bank levies are not an allowable deduction for income tax or corporation tax purposes’.
He added: ‘The legislation will also ensure that where a company makes a claim on or after today’s date for double taxation relief for a foreign bank levy against the charge to the UK bank levy, none of that foreign bank levy will be an allowable deduction for income tax or corporation tax purposes.’
‘Loopholes are being closed with immediate effect,’ the chancellor announced
Several new measures to tackle tax avoidance will take effect from today, the government has announced.
George Osborne said: ‘Hundreds of millions of pounds of tax loopholes are being closed with immediate effect, and we are investigating abusive use of partnerships.’
Michael Wistow, head of tax at Berwin Leighton Paisner, said: ‘Paradoxically the “loopholes” that so infuriate the chancellor have been created by excessive tinkering and changes to the tax regime by successive governments. Some of these so-called “loopholes” were called incentives when they were introduced.’
Draft legislation published today includes measures to counter schemes that aim to reduce corporation tax liability through ‘asymmetric tax treatment of loans or derivatives (tax mismatch schemes), including, although not limited to, schemes involving companies which are members of a partnership’.
David Gauke, the exchequer secretary, said in a written ministerial statement: ‘Due to the repeated use of partnerships and similar collective structures in tax avoidance schemes, the government will be considering the area of the taxation of partnerships and similar structures as part of its review of high risk areas of the tax code.’
Legislation is also being introduced to block:
‘schemes that use property return swaps to convert capital losses within a group into income losses, and that use the legislation to generate capital gains which are not in proportion to those actually arising from the swap contract’; and
‘schemes involving stock lending arrangements [in which] a company lends stock, and instead of receiving a manufactured payment which is taxable, for example as a trade receipt, receives value in some other non-taxable form’.
Income tax relief for non-trade payments of patent royalties is to be abolished, to counter an avoidance scheme exploiting the relief and to ‘simplify the tax code’.
Bank levy
Gauke announced that legislation to take effect from 1 January 2013 will ‘put beyond doubt that foreign bank levies are not an allowable deduction for income tax or corporation tax purposes’.
He added: ‘The legislation will also ensure that where a company makes a claim on or after today’s date for double taxation relief for a foreign bank levy against the charge to the UK bank levy, none of that foreign bank levy will be an allowable deduction for income tax or corporation tax purposes.’
