Modernising the Tax System for Trusts
Strips of Government Bonds
Gift Aid Admission Charges
Inheritance Tax
PAYE Rewrite of PAYE Regulations
IR35 Compliance
VAT Applying for Registration
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Budget day It has been announced that Budget Day for 2004 is to be on Wednesday 17th March. UK France Double Taxation Agreement Both the UK and French Governments have now signed the Treaty and it will come into force as soon as both countries complete all their relevant legal procedures. Modernising the Tax System for Trusts The Chancellor announced plans to modernise and simplify the Income Tax and Capital Gains Tax system for trusts in his Pre-Budget Report last December and discussions have already started with the public and representative bodies to consider the proposed changes. These changes are set to effect personal types of trust, rather than trusts such as venture capital trusts and unit trusts, with a view to reducing the complexity of the current tax system. At present, due to the differing sizes of trusts, individual beneficiaries often find that the rate of tax paid often differs from their marginal rate if assets are held via a trust. The main aim of modernising the tax system is to improve fairness by reducing the distorting effects of holding assets in a trust rather than directly. The Government also wants to reduce the tax and compliance burdens on smaller trusts. A number of discussion documents were issued by the Government in December and the aim is to introduce the system from Spring 2005. If you want to find out more about the proposed changes and details of the discussions to date then please contact us. Strips of Government Bonds Anti-Avoidance Measures Legislation is to be introduced in this years Finance Bill which will effect any disposal of strips from 15th January 2004 onwards. The changes will prevent income tax avoidance by way of transactions in strips of Government bonds. At present it is possible to enter into arrangements with the purpose of creating artificial losses. However under the new legislation, changes will be put in place to ensure that where there is an arrangement to gain a tax advantage, any losses will be limited to those which would have arisen based on market prices at the date of purchase and sale. If you feel that this new legislation may affect you please contact us. Gift Aid Admission Charges The Government is set to consult on possible changes to Gift Aid to prevent single day admission charges benefiting from the relief. Under the proposals, Gift Aid will only apply if the charity grants admission to its property for a certain period and there is no restriction in the number of visits that can be made within this period. It is suggested that the minimum period concerned should be 12 months. For more details of the possible implications of this change please contact us. Inheritance Tax Deceased Estates Loss Claims The Inland Revenue have just reissued claim forms for losses on the sale of shares and losses on the sale of land. Claims can be made where executors sell shares at a loss within 12 months of the date of death or sell land at a loss within 4 years of the same date and allow substitution of the lesser sales value for the value at the date of death. Please contact us for more information. Corporation Tax Chargeable Gains The value of the Retail Price Index, which should be used for calculating capital gains for corporation tax purposes, is 183.5 for December 2003. PAYE Rewrite of PAYE Regulations PAYE regulations have recently been updated and rewritten. The main reasons for the rewrite were to make the regulations easier to understand, give them a more logical order, make matters clearer and to make some minor changes to the law. The changes in the law are in relation to the following: - Issuing agency workers with a P45 - P45 procedures on the death of an employee or pensioner - Notifying the Inland Revenue of existence of a system for splitting tips - Changes to P60 details for 2004/05 onwards These regulations will come into effect from 6th April 2004. If you wish to find out more about these changes and the rewritten regulations then please contact us. IR35 Compliance The Inland Revenue have recently released more details of the circumstances under which they will approach a client for information concerning working practices during an employer compliance review in relation to application of the IR35 legislation. If you are operating as a service company or are a client of such a company then please contact us for more information VAT Applying for Registration Due to an unexpected increase in the number of businesses applying to register for VAT Customs and Excise say that a number of businesses have experienced delays in obtaining their VAT registration number. Customs and Excise say that normally, if an application form is completed correctly and submitted to them, a business can expect to receive their VAT registration number within 15 days of receipt of the form. However with the present increase in applications, which appears to have been caused by the introduction of various initiatives to support small businesses, some are taking up to 8 weeks to process. Customs and Excise are however confident that they will return to their normal processing times in the near future. |