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In brief: CFCs and loan relationships; contracts for difference; capital requirements; investment funds...

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CFCs and loan relationships

HMRC has published supplementary guidance on the interaction between CTA 2009 s 441 (loan relationships for unallowable purposes) and the CFC rules in TIOPA 2010 Part 9A, and its approach in cases where there is uncertainty as to whether the legislation will apply.

Contracts for difference regulations

The Corporation Tax Act 2009, Section 582 (Contract for Differences) (Amendment) Order, SI 2013/3218, brings ‘contracts for difference’ and ‘investment contracts’ under Energy Act 2013 s 6 or Sch 2 para 1(1) within the scope of the definition of ‘contract for differences’ in CTA 2009 s 582. HMRC has published a tax information and impact note (TIIN).

Capital requirements regulations

The Taxation of Regulatory Capital Securities Regulations, SI 2013/3209, provide that certain securities issued to meet new regulatory requirements imposed by EU legislation will be taxed on the basis that they are debt instruments. HMRC has published a TIIN. See also The Capital Requirements Regulations, SI 2013/3115, which implement in part the package of EU legislation known as CRD4.

Authorised investment funds

Industry bodies have backed a Budget 2013 proposal to remove the requirement to withhold tax on interest distributions from funds that are not marketed to UK investors, HMRC said. The Authorised Investment Funds (Tax) (Amendment) (No. 2) Regulations, SI 2013/2994, make the necessary changes to the AIF regulations. References to ‘ordinary residence’ are removed with effect from 2014/15, but the residence condition will continue to be met where there is an existing (pre-6 April 2014) declaration that the participant is not ordinarily resident.

Investment transactions ‘white list’

HMRC invited comments by 17 January on draft regulations expanding the ‘white list’ for the purpose of the investment management exemption and collective investment schemes, following consultation. A TIIN was also published, and three versions of the list are to be consolidated into a single list in one statutory instrument.

PAYE payment booklets

HMRC has advised employers, agents and payroll providers that employer payment booklets and related letters will no longer carry details of the issuing office. The documents will provide guidance on making payment electronically or by post.

RTI: micro employers

HMRC has invited comments by 24 January on draft regulations issued following the announcement that existing employers with nine or fewer employees, who need more time to adapt to real time information reporting, will be able to report on or before the last payday in the tax month until April 2016.

Employment-related shares and securities

HMRC’s Employment-related shares & securities bulletin for December 2013 includes articles on self-certification of SIP, SAYE and CSOP schemes from 6 April 2014; the amendment of annual employee share scheme returns; and draft legislation published on 10 December 2013.

Residence guidance updated

HMRC has updated its tax residence indicator tool and its guidance note RDR3 on the statutory residence test.

CTFs and junior ISAs

The government will allow the transfer of savings from child trust funds (CTFs) into junior ISAs, HM Treasury confirmed after a consultation drew 761 responses. The government noted the concerns of respondents who were not supportive, but it believed the proposal should be implemented ‘on the principle of fairness’. It was difficult to estimate when the necessary legislation would come into effect, the Treasury added. ‘However, we hope that the first transfers will be possible by April 2015.’

Trusts and estates update

HMRC’s Trusts & estates newsletter for December 2013 describes a ‘re-engineering’ of IHT compliance processes, and clarifies two points regarding the ten-year anniversary charge for a discounted gift scheme that were discussed in Revenue & Customs Brief 22/13.

SDLT: ‘de-enveloping’

HMRC has published guidance on the tax implications of ‘de-enveloping’ a property in order, for example, to take a company and its shareholders outside the scope of the annual tax on enveloped dwellings (ATED). The guidance note (see sets out when HMRC ‘will not consider there to be any consideration given’ for the transfer of the property.

VAT retail exports scheme

HMRC will continue to explore options for a digital approach to modernisation of the VAT retail exports scheme, following a recent consultation, and will set out its plans in ‘early 2014’. A number of changes to the current scheme will be made.

VAT refunds made by manufacturers

HMRC has published a TIIN and is analysing responses to a consultation on new rules to allow manufacturers to adjust their VAT to take account of refunds they make to final consumers. Comments are invited by 31 January on draft regulations providing for a VAT adjustment where the first supplier in a supply chain makes a refund directly to the final consumer in respect of unsatisfactory goods.

VAT and excise duties

The Value Added Tax (Amendment) (No. 3) Regulations, SI 2013/3211, amend SI 1995/2518 reg 137 to update the territorial scope of UK VAT legislation to take account of changes to the territorial scope of Council Directive 2006/112/EC in relation to French overseas territories. The Excise Goods (Holding, Movement and Duty Point) (Amendment) Regulations, SI 2013/3210, make corresponding changes to UK excise duty legislation. Both instruments take effect from 1 January 2014.

HMRC has updated Notice 725: The single market; Notice 701/20: Caravans and houseboats; and Notice 707: Personal export scheme.

Contractor loan schemes

HMRC invited contractors who have used a ‘contractor loan scheme’ to come forward and resolve their tax position after the First-tier Tribunal ‘comprehensively and robustly dismissed’ the taxpayer’s arguments in Philip Boyle v HMRC (TC03103). The decision meant that money paid over to Mr Boyle as loans was taxable as employment income, HMRC said in the latest addition to its ‘spotlights’ page.

Concessions update

HMRC has updated its list IR1 (extra-statutory concessions) to take account of recent legislation – primarily FA 2013 – and withdrawals.

Recognised stock exchanges

HMRC has designated the market operated by The Channel Islands Securities Exchange Authority Ltd as a recognised stock exchange under ITA 2007 s 1005 (1)(b) with effect from 20 December 2013. The market is also regarded as a recognised stock exchange for inheritance tax purposes from the same date.

Issue: 1199
Categories: News