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CIOT queries HMT on post-election Finance Bill

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The CIOT has asked the Treasury for clarification of taxpayers’ compliance obligations in relation to tax charges which may arise under certain provisions dropped from Finance Bill 2017, in the interim period between 6 April 2017 and introduction of a post-election Finance Bill.

The institute is looking for certainty around whether the commencement date for those provisions originally due to take effect from April 2017 will be maintained on their reintroduction.

In particular, the CIOT looks at the position on the death of a taxpayer during this period, which gives rise to a tax charge under the provisions introducing reforms to the taxation of non-domiciles and extending IHT to indirect ownership of UK residential property. The CIOT points out that such a charge would not be open to deferral or postponement through taxpayer action or inaction. The CIOT asks specifically:

  • what is the IHT position for a non-UK domiciliary holding UK residential property via an overseas structure, who dies in the UK between 6 April 2017 and the introduction of the new Finance Bill?
  • what is the position for a non-UK domiciliary who dies in the UK in this interim period holding non-UK situs assets?
  • would a ten-year anniversary charge that arises in the interim period be chargeable retrospectively on a trust created by a UK-resident individual while non-UK domiciled?
  • what is the income tax and CGT position if income or property is provided in the interim period in respect of a retrospectively protected trust?

The CIOT has requested an early response despite the election purdah period. See