The Budget conveys mixed messages, particularly for high net worth individuals. Significant changes are proposed to income tax withholding on UK interest, including scrapping the exemption for ‘short’ interest. The rules applicable to manufactured payments are to be simplified, with income tax withholding on ‘MODs’ likely to disappear altogether. The Indian Budget includes proposals for retrospective legislation which would reverse the recent Vodafone decision. The taxpayer’s success continues in First Nationwide, and HSBC succeeds again in getting an SDRT charge held incompatible with EC law.
