On 20 July, the Treasury published a raft of legislation in draft which will form the basis of Finance Bill 2023. The Bill itself would usually be expected in the autumn, following a period of consultation on the draft clauses which closes on 14 September 2022. This year, the timetable could change, depending on the view of the incoming Prime Minister and, potentially, a revised team of Treasury ministers. As Lucy Frazer, current Financial Secretary to the Treasury, points out in a Written Statement: ‘The final contents of Finance Bill 2022-23 will be a decision for the Chancellor at the next Budget.’
The following items are new, not having previously been announced:
Qualifying Asset Holding Companies – the regime will be expanded to cover a broader range of investment structures, and the existing anti-fragmentation rule is extended (with immediate effect) so that it also applies where interests are held through one or more QAHCs as well as directly in the company concerned.
Dormant Assets Scheme – the scheme will be further extended to include assets from other financial services sectors. Broadly, these changes ensure assets can be transferred without tax implications. For example, SI 2022/723 has already removed transfers of dormant assets from the scope of the unauthorised payments rules.
Lump sum exit payments – this is relevant to individuals leaving or retiring from farming and who have applied for a payment under the Lump Sum Exit Scheme. Subject to meeting certain conditions, those payments will be treated as capital rather than income.
Double taxation relief restriction – with immediate effect, this measure will prevent new claims for double taxation relief credit calculated at the foreign nominal rate of tax which could otherwise arise in relation to overseas dividends received by UK companies in periods prior to the introduction of distribution exemption in 2009.
Previously announced items include:
Pillar 2 – draft legislation is published for implementation of Pillar 2 in the UK. This is a very weighty volume, running to 116 pages and follows the earlier consultation on UK implementation. The legislation is expected to apply for accounting periods commencing on or after 31 December 2023.
R&D qualifying expenditure – data and cloud costs will be included, and relief will be ‘refocused’ towards R&D activity in the UK, as previously announced.
Relief on disposals of joint interests in land – changes to the CGT rules will ensure roll-over relief and private residence relief are available to members of limited liability partnerships and Scottish partnerships.
Pensions tax relief for net pay arrangements – HMRC will be able to make top-up payments directly to low-earners in pension schemes using a net pay arrangement from 2024–25 onwards.
Homes for Ukraine Scheme – temporary reliefs from SDLT and ATED will be introduced for companies which make a dwelling available under the scheme.
On 20 July, the Treasury published a raft of legislation in draft which will form the basis of Finance Bill 2023. The Bill itself would usually be expected in the autumn, following a period of consultation on the draft clauses which closes on 14 September 2022. This year, the timetable could change, depending on the view of the incoming Prime Minister and, potentially, a revised team of Treasury ministers. As Lucy Frazer, current Financial Secretary to the Treasury, points out in a Written Statement: ‘The final contents of Finance Bill 2022-23 will be a decision for the Chancellor at the next Budget.’
The following items are new, not having previously been announced:
Qualifying Asset Holding Companies – the regime will be expanded to cover a broader range of investment structures, and the existing anti-fragmentation rule is extended (with immediate effect) so that it also applies where interests are held through one or more QAHCs as well as directly in the company concerned.
Dormant Assets Scheme – the scheme will be further extended to include assets from other financial services sectors. Broadly, these changes ensure assets can be transferred without tax implications. For example, SI 2022/723 has already removed transfers of dormant assets from the scope of the unauthorised payments rules.
Lump sum exit payments – this is relevant to individuals leaving or retiring from farming and who have applied for a payment under the Lump Sum Exit Scheme. Subject to meeting certain conditions, those payments will be treated as capital rather than income.
Double taxation relief restriction – with immediate effect, this measure will prevent new claims for double taxation relief credit calculated at the foreign nominal rate of tax which could otherwise arise in relation to overseas dividends received by UK companies in periods prior to the introduction of distribution exemption in 2009.
Previously announced items include:
Pillar 2 – draft legislation is published for implementation of Pillar 2 in the UK. This is a very weighty volume, running to 116 pages and follows the earlier consultation on UK implementation. The legislation is expected to apply for accounting periods commencing on or after 31 December 2023.
R&D qualifying expenditure – data and cloud costs will be included, and relief will be ‘refocused’ towards R&D activity in the UK, as previously announced.
Relief on disposals of joint interests in land – changes to the CGT rules will ensure roll-over relief and private residence relief are available to members of limited liability partnerships and Scottish partnerships.
Pensions tax relief for net pay arrangements – HMRC will be able to make top-up payments directly to low-earners in pension schemes using a net pay arrangement from 2024–25 onwards.
Homes for Ukraine Scheme – temporary reliefs from SDLT and ATED will be introduced for companies which make a dwelling available under the scheme.
