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In brief: royal assent; remittance basis; personal allowance; pension flexibility; childcare; IHT; property investment funds; ATED; CbC reporting; cluster area; guidance

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Royal assent

The Finance Bill received royal assent on 17 July, and has formally become Finance Act 2014.

Remittance basis restrictions for non-doms with dual employment

HMRC has published guidance on the new rules, which came into force on 6 April 2014, for taxing overseas employment income of non-domiciled individuals on the arising basis, rather than the remittance basis, where they hold both UK and overseas employments and meet certain conditions. The conditions involve links between employments, for instance; one employment would not be held without the other or the employments deal with the same customers, and associated employers.The conditions also relate to the amount of tax credit obtained for foreign tax, if the tax credit represents more than 65%, the arising basis will apply.

Consultation on restricting personal allowance for non-residents

The government is consulting until 3 October 2014 on whether the UK should restrict the entitlement of non-resident individuals to the personal allowance. The proposed model for any such restriction would involve assessing the strength of an individual's economic connections with the UK, possibly by applying a percentage test to determine where most of their income arises.

Pension flexibility: transitional arrangements

HMRC has published draft guidance on transitional issues associated with the pension flexibility changes that came into force on 27 March 2014. The guidance does not cover the changes that will apply from April 2015, to be included in a new Pensions Tax Bill in due course. For the pension commencement lump sum (sometimes called a tax-free lump sum) to be paid tax-free taxpayers must within, certain time-limits, have a pension associated with the lump sum. The changes described in the guidance allow them longer to decide how to access that pension. These special rules are temporary and taxpayers will need to take their pension commencement lump sum (PCLS) before 6 April 2015 and the associated pension before 6 October 2015 for these rules to apply.

Childcare Payments Bill: delegated legislation

HMRC has published a memorandum which identifies the provisions in the Childcare Payments Bill which confer powers to make delegated legislation. It explains the purpose of the delegated power proposed, why the matter is to be dealt with in delegated legislation, and the nature and justification for any parliamentary procedures which apply. All of the delegated powers in the Bill are to be exercised by regulations made by statutory instrument either by the Treasury or, where the matters concerned relate to operational matters, HMRC.

IHT: Consultation on exemption for emergency service personnel

HMRC has published a consultation document proposing to extend the inheritance tax exemption for armed forces personnel to all emergency service personnel who die in the line of duty. Comments are invited by 15 October.

SDLT consultation for property investment funds

HM Treasury is consulting until 12 September 2014 on proposed changes to the way SDLT applies to property authorized investment funds (PAIFs) and co-ownership authorised contractual schemes (CoACSs). The consultation seeks views on the impact (including possible tax avoidance) of introducing an SDLT seeding relief for PAIFs and changing the SDLT treatment of transactions in units of CoACSs investing in property – to ensure that SDLT is not triggered by a change of unit ownership.

ATED consultation on reducing administrative burden

HMRC is consulting until 16 September 2014 on two options to reduce the administrative burden for commercial businesses entitled to claim ATED (annual tax on enveloped dwellings) reliefs.

New EC consultation on CbC reporting

The EC has launched a consultation on the potential economic consequences of country by country reporting by institutions required by article 89 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD), in particular as regards information contained in article 89(1) (d), (e) and (f) thereof, including the impact on competitiveness, investment and credit availability and the stability of the financial system. The results of the consultation will be taken into account in writing the Commission’s assessment and report required under article 89(3) of CRD. Comments are to be submitted via an online questionnaire. The consultation will run until 12 September 2014.

Cluster area allowance consultation

HM Treasury has published a consultation document for public comment proposing a new ‘cluster area allowance’. According to the Treasury, the allowance, which was announced at Budget 2014, ‘aims to support investment in ultra high pressure, high temperature oil and gas projects and to encourage exploration in surrounding areas (or “clusters”).’ The consultation closes on 30 September 2014.

HMRC guidance

New HMRC guidance is available from HMRC’s website, including:

  • Employment-Related Securities Bulletin No 1;
  • JCCC CIP (14) 52: Withdrawal of ‘Guide to importing and exporting – Breaking down the barriers’; and
  • Notices 451A , 455A and 147A on general betting duty, remote gaming duty and on pool betting duty.
Issue: 1226
Categories: News