Tax avoidance
Changes to the disclosure regime
The rules requiring disclosure of the creation,
marketing and use of tax avoidance schemes will be extended to include the
whole of income tax, corporation tax and capital gains tax. The existing
criteria for schemes to be disclosed will be replaced by a requirement based on
hallmarks, on similar lines to the VAT disclosure rules. The time limit for
disclosure of schemes devised in-house will be reduced to 30 days from the
implementation of the scheme, but individuals and SMEs will no longer have to
disclose in-house schemes. The changes take effect from 1 July 2006.
Financial products – anti-avoidance
A range of measures have been introduced to counter
corporate tax avoidance. These include schemes based on stock lending on
non-commercial terms, schemes involving the purchase and sale of distribution
rights on shares and schemes using intra-group arrangements. The measures take
effect from various dates between 5 December 2005 and 22 March 2006.
Charities
Measures effective from 22 March 2006 will restrict
the scope for large donors to receive benefits from a charity after tax relief
has been granted on a donation. They also strengthen the provisions that
withdraw tax relief where charitable funds are used for non-charitable
purposes. A further change from 1 April 2006 will extend to non-close companies
the rules that restrict the benefits they can receive in return for a donation
to charity.
International tax enforcement
The UK will have the power to enter into international
agreements for mutual assistance in the enforcement of indirect taxes, from the
date of Royal Assent. There are already such powers for direct taxes.
The summary has been prepared very rapidly and
may contain errors for which we cannot be held responsible. The proposals are
in any event subject to amendment before the Finance Act is passed. Advice
should be taken before any action. |
