The CIOT welcomes inheritance tax changes

The Chartered Institute of Taxation (CIOT) welcomes the inheritance tax changes announced in the Budget, which have important implications for individuals and trustees.

There has been some uncertainty about the position where a pre-22 March 2006 life interest comes to an end and is replaced before 5 April 2008 by another life interest in favour of the same life tenant. Draft legislation has now been published to make it clear that, in these circumstances, there is no chargeable transfer and therefore no inheritance tax payable.

Emma Chamberlain, Chairman of the CIOT’s Succession Taxes Sub-Committee, says: “This is a very welcome…

No rabbits in sight

There were no rabbits in sight during this year’s Budget. On corporation tax, fuel duty, disguised interest rules and green taxes there will be time for a full and proper consultation before implementation.

The Chartered Institute of Taxation (CIOT) has long been calling for no ‘rabbits out of the hat’ from the Chancellor and HM Treasury.

Rob Ellerby, CIOT President, says: “Irrespective of whether you agree or disagree with the policy, it is vital that the Government consults. Consultation gives the proposals the chance to work as the Government wishes. Without consultation there may be ‘unintended consequences’ that lead to…

Income Shifting Plans Could Damage Family Businesses

The Government’s consultation on the proposed introduction of income shifting legislation introduces unnecessary complexity and uncertainty for businesses, according to The Institute of Chartered Accountants of Scotland. In particular, the effect on family operated businesses could be damaging. Income shifting refers to situations where money received by a person, such as a profit share or dividend, is deemed for the purposes of taxation to belong to someone else who pays tax at a higher rate.

Derek Allen, Director of Taxation at ICAS commented, “In taxation there should be certainty and clarity. The proposals within this paper go against these two…

Non-Domicile Legislation A Recipe For Non-Compliance

Treasury proposals for taxing ‘non-domiciled’ individuals working in the UK will affect significant numbers of low-paid migrant workers, many of whom will be unable to cope with the compliance requirements, says The Institute of Chartered Accountants of Scotland (ICAS).

ICAS recommends in its submission to the Treasury consultation on residence and domicile legislation that the introduction of the new laws are deferred until April 2009 to allow time for advisers and taxpayers to be able to understand and comply with the new rules. Allowing this additional time before implementation would ensure that the drafting will produce legislation that is clear…

Tax law should be clear and certain

A taxpayer has every right to expect the law to be clear and certain. This is definitely not the case under the proposals for changing the laws of residence and domicile.

The Chartered Institute of Taxation (CIOT) believes that the Government has a golden opportunity to introduce a comprehensive, statutory residence test based on objective criteria, such as day-counting. This would afford much needed certainty in what is currently a very grey area.

Furthermore, in common with many other professional bodies and organisations, the CIOT advocates a 1-year delay in implementing the proposed legislation affecting foreign domiciliaries.

Rob Ellerby, CIOT…