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In brief: AIFM NIC; total return swaps; 2014/15 regs; REITs; FATCA; patent box; sharing data; double tax; guidance

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AIFM firm partnerships and partners: class 4 NIC

Draft Social Security (Contributions) Regulations 2014 have been published which will amend the principal regulations relating to the liability of alternative investment fund manager (AIFM) partnerships and partners for class 4 contributions in respect of deferred profits earned by partners in AIFM firms. Related tax legislation is to be introduced in Finance Bill 2014. Where ITTOIA 2005 s 863D applies and an AIFM firm has made an election for the special provisions to apply, a partner in the firm may allocate profits to the firm. Those allocated profits may subsequently be vested in the individual partner (see ITTOIA 2005 s 863F). These regulations provide that no class 4 NIC will be charged on the allocation of the profits to the firm. Class 4 contributions will be charged when the allocated profit is vested in the individual partner.

Avoidance using total return swaps

HMRC has published a guidance note on the clauses published at Autumn Statement 2013 on avoidance schemes using total return swaps. The measure to counter avoidance using total return swaps was announced on 5 December 2013 and had immediate effect. In this technical note, HMRC explains that the new rules are designed to counter arrangements that aim to secure tax deductions for payments that represent profits of the business, and there is no intention to catch normal commercial activities using derivatives. This technical note was published on 13 December 2013 and it replaces the one published the previous day.

2014/15 regulations

The Van Benefit and Car and Van Fuel Benefit Order, SI 2013/3033, comes into force on 31 December 2013. This order has effect for the 2014/15 tax year onwards and amends ITEPA 2003 to increase: (i) the multiplier used to calculate the cash equivalent of the benefit of car fuel received by an employee for private use, from £21,100 to £21,700; (ii) the figure which represents the cash equivalent of the benefit of a van received by an employee, from £3,000 to £3,090; and (iii) the van fuel benefit figure from £564 to £581. In addition, The Income Tax (Indexation) Order, SI 2013/3088, replaces certain amounts specified in the Income Tax Act 2007 with increased amounts for the tax year 2014/15.

Draft REITs regulations

The Real Estate Investment Trust (Amendments to the Corporation Tax Act 2010 and Consequential Amendment) Regulations, SI 2014/Draft, have been published in draft amending the list of items to be taken into account in calculating the costs of debt finance in relation to real estate investment trusts (REITs).

US FATCA: Jersey, Guernsey, Isle of Man and Malta

On 16 December 2013, Malta became the 15th country to sign an inter-governmental agreement (IGA) with the USA for the implementation of FATCA, under which financial information on US taxpayers will be automatically provided to the US IRS. On 13 December 2013, each of Jersey, Guernsey and the Isle of Man signed an intergovernmental agreement (IGA) with the USA in relation to FATCA, which follows the signing of a similar agreement by each of them with the UK.

ECOFIN conclusions on patent box rules

ECOFIN asked the Code of Conduct Group to assess or consider all patent box rules in the EU, including those already assessed or considered before, ensuring consistency with the principle of equal treatment, also against the background of international developments, including those in relation to the OECD BEPS initiative. Kate Alexander, partner at EY, notes that ‘this review should take place under the Greek presidency, with a view to reaching a conclusion by mid-2014’ (see page 6).

EC plan on sharing data to fight tax evasion

An European Commission plan requiring member states to automatically collect and share data on income from employment, director’s fees, life insurance, pensions and property has been approved by the members of the European Parliament on 11 December 2013. Member states will also be obliged to share information on dividends, capital gains and bank account balances. The plan, to be introduced by 2017, aims to close loopholes used for tax evasion.

Double tax agreements

International Tax Enforcement (Norway) Order, SI 2013/3144, and the Double Taxation Relief and International Tax Enforcement (Panama) Order, SI 2013/3149, have been made. Draft UK orders concerning double tax relief and international tax enforcement have been published for: Brunei Darussalam; Marshall Islands; Spain; Jersey; Isle of Man; Guernsey; and India.

Further HMRC guidance

HMRC has also published the following:

  • a tax information and impact note (TIIN) on preventing offshore intermediaries being used to avoid employment taxes that replaces the TIIN previously published on 14 October 2013.
  • a TIIN on the draft regulatory capital securities regulations.
  • CWG2 (2013) Employer further guide to PAYE;
  • an update for pension scheme administrators on the Scottish rate of income tax for relief at source on contributions to registered pension schemes by Scottish taxpayers;
  • Revenue & Customs Brief 37/13 on tonnage tax qualifying ships and flagging; and
  • Revenue & Customs Brief 38/13 on intrastat changes from 1 January 2014.
Issue: 1198
Categories: News