The UK has long been a very attractive location for International employees and/or individuals looking for a base in Europe – this is due to the fact that we have a ‘remittance basis’ of assessment for non UK nationals who are resident in the UK. While this remains in place, recent changes have given rise to potential pitfalls that may catch the unwary… (more…)

It is now well known that significant changes for non UK domiciliaries will become effective for the 2008/09 UK tax year, which could substantially affect tax payments due by 31 January 2010. That seems a long way off, but for many the time for decisions that will impact on that tax payment is now. (more…)

With petrol prices soaring, hard-pressed motorists are searching for ways to cut the costs of driving. Those who use their cars for businesses are particularly aggrieved that the allowance set by HMRC for business travel by members of the public has been frozen at 40p a mile since 2002. View our press release for further details.

A brief note to let you know that a new law enacted yesterday (17 June 2008) introduces an immediate tax charge for certain individuals who expatriate or give up their green card. The tax charge will arise on any inherent gain on their worldwide assets and on future gains and bequests to US citizens or residents.

Trustees will also need to consider whether they have any beneficiaries who are caught by the new legislation, as they may need to deduct US withholding tax from distributions to such individuals.
Whilst there are certain exemptions, it is strongly recommended that these individuals wishing to expatriate seek early professional advice.

Since the announcement of the entrepreneurs’ relief legislation in March this year, a great deal of time has been spent analysing the new rules and in identifying particular areas of concern. Of particular interest are areas where, prior to 6 April 2008, business asset taper relief could have applied, but entrepreneurs’ relief will not be due in future, leading to a rise in the effective rate of capital gains tax from 10% to 18%.

A number of these areas have already been identified – certain employee shareholdings, for example, as well as many commercial property landlords, will pay more tax under the new rules. A further group who are potentially affected are those who have retained assets outside their personal trading company and leased their asset to the company. This would also be the case with a family partnership, but for simplicity we will refer only to trading companies in what follows. (more…)

Those with long memories may recollect that prior to April 1998, capital gains did not attract taper relief, and individuals who had built up businesses (including if they had a significant shareholding in a personal trading company) might qualify for retirement relief on the first £1m of gains. (more…)

Draft legislation was published on 6 December 2007 to address the Government’s concerns regarding the practice of ‘income shifting’.

Income shifting (sometimes called ‘income-splitting’) is defined as an individual’s ability “to dissociate themselves from income that they would have received in order that the income is taxed in the hands of another individual at a lower rate”.

The proposals are due to come into effect from 6 April 2008 and are the subject of a consultation period due to end on 28 February 2008. (more…)