HMT Press Notices
PN01 -Budget 2011 press notice
The Budget's stated aims are to stick to the Government's plan
to reduce the deficit, set out a
new model of economic growth,
reform the nation's economy and help families with the cost of living.
The new growth model is contained in the Plan for Growth, which
is published alongside the Budget. Measures announced in the Budget
have been analysed under the headings of
The following are the key tax measures grouped under this heading:
- a one per cent cut in the corporation tax rate from April 2011 to 26 per cent, with further reductions thereafter and an increase in bank levy from January 2011;
- changes to the CFC rules in 2012, with an effective 5.75 per cent rate on overseas financing income;
- enhanced tax incentives for investment in higher-risk companies and for SMEs undertaking research and development activity;
- 11 new enterprise zones offering tax breaks;
- consultation on the integration of income tax and NICs;
- scrapping of 43 tax reliefs following the recommendations of the Office of Tax Simplification; and
- reforms to the stamp duty land tax treatment of
bulk purchases of residential property.
The following are the key tax measures grouped under this heading:
- a one penny per litre cut in fuel duty;
- the abolition of the 2009 Budget fuel duty escalator, to be replaced by a
fair fuel stabiliser;
- an increase in the personal allowance of £630 in April 2012;
- default indexation for direct taxes to be CPI from April 2012 but to be RPI for the rest of this Parliament for annual increases in employers' NIC threshold, age-related allowances and other, smaller, thresholds;
- a crackdown on tax avoidance schemes;
- the non-domiciled individuals' annual charge to be £50,000 for those resident for 12 or more years, but tax removed on income remitted for commercial investment in UK businesses;
- the introduction of a statutory residence test;
- a one-tenth reduction in the inheritance tax rate when at least one-tenth of a person’s net estate is donated to charity; and
Government sets out new plan for growth
The Government has set out a comprehensive plan to increase the
growth of the UK economy. The plan for growth is based around four
- to create the most competitive tax system in the G20;
- to make the UK the best place in Europe to start, finance and grow a business;
- to encourage investment and exports as a route to a more balanced economy; and
- to create a more educated workforce that is the most flexible in Europe.
The Budget contains the following tax measures
addressing the first of these aims:
- a one per cent cut in corporation tax each year from April 2011 to 26 per cent, falling to 23 per cent by 2014, with an increase in the bank levy from January 2012 to offset the benefit to banks;
- changes to the Controlled Foreign Company (CFC) rules in 2012 to improve the competitiveness of the UK, including a UK tax rate on overseas financing income of 5.75 per cent;
- an increase in the rate of SME R&D tax relief to 200 per cent in 2011 and 225 per cent in 2012;
- an increase in the rate of Enterprise Investment Scheme tax relief to 30 per cent from April 2011; and
- doubling the lifetime limit on capital gains qualifying for Entrepreneurs' Relief.
The plan for growth also includes several tax
measures to deliver on the third aim identified above:
- an extension of the capital allowances short-life asset regime for plant and machinery from four to eight years, from April 2011, to bring forward investment in new equipment;
- the implementation of 11 enterprise zones across England, with simplified planning rules and tax breaks for businesses, with local areas to bid for a further 10;
- a new £250m scheme that will offer over 10,000 first-time home buyers an equity investment of 20 per cent towards the deposit on new-build homes, and reforms to the stamp duty land tax treatment of
bulk purchases of residential property.
HMRC Tax Information and Impact Notes (TIINs)
TIIN01 Enterprise investment schemes and venture capital trusts
Legislation will be introduced in Finance Bill 2011 to increase
the rate of income tax relief given under the enterprise investment
scheme (EIS) from 20 per cent to 30 per cent of the amount subscribed
for shares, subject to State Aid approval. The relief will have effect
for shares issued on or after 6 April 2011.
Again subject to
state aid approval, legislation will be introduced in Finance Bill
2012 to increase:
- the thresholds for the maximum size of qualifying company for both EIS and venture capital trusts;
- the maximum amount that can be invested in an individual company; and
- the annual amount that an individual can invest under the EIS.
These changes will apply from 6 April 2012.
Government will bring forward and consult on further changes to the
schemes, including proposals to give additional support through the
EIS for seed investment.
Legislation will also be introduced
in Finance Bill 2012 providing that companies whose trade consists
wholly or substantially in the receipt of feed-in tariffs or similar
subsidies will only be eligible for the two schemes in restricted
TIIN02 Approved mileage allowance payments
Employees who use their own cars or vans for business mileage may
be reimbursed by their employers using the system of approved mileage
allowance payments. The rate per mile that employers may reimburse
tax-free is increasing from 40p to 45p from 6 April 2011 for up to
10,000 business miles per tax year. There is no change to the rate
of 25p that may be reimbursed for mileage over the 10,000 limit.
who are not reimbursed may claim mileage allowance relief, again using
the figures of 45p and 25p from April 2011.
Entrepreneurs' relief: increase in the lifetime limit
In a measure to be included in the 2011 Finance Bill, the lifetime limit for capital gains tax entrepreneurs' relief will be increased from £5m to £10m. The new limit will apply in relation to qualifying business disposals made on or after 6 April 2011.
Reduced childcare relief for higher rate taxpayers
As announced in the 2009 Pre-Budget Report, legislation will be
introduced in Finance Bill 2011 to restrict the level of income tax
relief for childcare available to higher rate and additional rate
taxpayers so that it matches the amount available to basic rate taxpayers.
From 6 April 2011, the income tax exemption for childcare vouchers
and directly-contracted childcare provided through employer-supported
(ESC) schemes will be capped at approximately the same monetary value.
This will be achieved by introducing new income tax-exempt limits
of £28 per week for higher rate taxpayers and £22 per
week for additional rate taxpayers. This will ensure that the monetary
equivalent of the tax relief entitlement for all taxpayers will be
based on £11 per week.
The measure only applies to individuals
who join ESC schemes on or after 6 April 2011.
TIIN05 Subsistence allowance paid to experts seconded to European
Union bodies located in the UK
Legislation will be introduced
in the Finance Bill 2011 to exempt from income tax subsistence allowances
paid to UK experts seconded by their employers to certain EU bodies,
where payments are made for periods beginning on or after 1 January
Introduction of Junior ISAs
The 2011 Finance Bill will include provision for Junior Individual
Savings Accounts (Junior ISAs), which are expected to be available
from Autumn 2011. This follows the measure which ended eligibility
for child trust fund (CTF) accounts from 3 January 2011.
UK-resident person under the age of 18 who does not have a CTF will
be eligible for a Junior ISA. Junior ISAs will be available as cash
products and as stocks and shares products and they will qualify for
income tax relief and capital gains tax relief.
TIIN07 Income tax personal allowances for those aged under 65 for 2012-13
Legislation in Finance Bill 2012 will:
- increase the personal allowance for those aged under 65 to £8,105; and
- reduce the basic rate limit to £34,370.
For 2012–13, all other income tax personal allowances and limits
that are subject to indexation will be increased in line with the
retail prices index.
TIIN 08 CPI indexation of National Insurance contribution rates, limits and thresholds
From 2012–13, the basis for indexation of the following National
Insurance contribution (NICs) rates, limits and thresholds will be
in line with the consumer price index (CPI) instead of the retail
price index (RPI):
- the Class 1 lower earnings limit, which is the level of earnings at which employees start to accrue contributory benefit entitlement;
- the Class 1 primary threshold, which is the level of earnings at which employees begin to pay Class 1 NICs;
- the rate of Class 2 NICs payable by the self-employed;
- the Class 2 small earnings exception, which sets the level of earnings below which the self-employed can be exempted from paying Class 2 NICs;
- the rate of Class 3 NICs payable by those wishing to fill gaps in their contribution record for basic state pension and bereavement purposes; and
- the Class 4 lower profits limit, which is the level of profits at which the self-employed begin to pay Class 4 NICs.
The secondary threshold for Class 1 employer
NICs will be over-indexed compared with CPI and rise by the equivalent
of RPI for the course of this Parliament.
The annual levels
of the Class 1 upper earnings limit and Class 4 upper profits limit
will continue to be aligned with the income tax higher rate threshold
(the sum of the personal allowance and the basic rate limit).
TIIN09 CPI indexation: annual ISA subscription limit
Increases in the annual individual savings account (ISA) subscription
limit are to be calculated by reference to the consumer prices index
(CPI), rather than by reference to the retail prices index (RPI).
This change will apply for 2012–13 and later years; the limit
for 2011–12 of £10,680, which was set by reference to
the RPI, will not be changed.
The CPI for September in the preceding
year will be used for the calculations and the increased limit will
be rounded to the nearest multiple of £120 to allow for round-figure
monthly savings amounts. If there are negative changes in the CPI,
the limit will not be reduced. The cash ISA limit will continue to
be one-half of the value of the stocks and shares ISA limit.
TIIN10 CPI indexation: capital gains tax annual exempt amount
Increases in the capital gains tax annual exempt amount (AEA) are
to be calculated by reference to the consumer prices index (CPI),
rather than by reference to the retail prices index (RPI). This change
will be included in the Finance Bill 2012 and will apply for 2012–13
and later years.
Currently, the AEA increase is calculated by
reference to the increase in the RPI in the 12 months to September
in the preceding year, rounded to the nearest £100, but it can
be overriden by Parliament with a higher or lower figure. This process
will continue, with the substitution of CPI for RPI.
TIIN11 Corporation tax main rate
Further reductions in the main rate of corporation tax for non-ring
fence profits have been announced. The main rate will be:
- for financial year 2011 (i.e. the year beginning on 1 April 2011), 26 per cent;
- for financial year 2012, 25 per cent;
- for financial year 2013, 24 per cent; and
- for financial year 2014, 23 per cent.
main rate on ring fence profits will remain at 30 per cent.
TIIN12 Capital allowances: short-life asset
Changes to the rules for capital allowances on plant and machinery
mean that more businesses will benefit if they make short-life asset
elections. The changes, applying for expenditure incurred from 1 or
6 April 2011, will benefit those businesses that spend more than the
annual investment allowance (AIA) limit in a given year.
a short-life asset election can be beneficial to a business if the
asset in question has a relatively high rate of depreciation and is
sold within (broadly) four years from the end of the chargeable period
in which it was bought. The change to be introduced from next month
extends this four-year period to eight years.
This measure has
no effect on the types of asset that qualify for plant and machinery
allowances but accelerates the rate at which allowances are given
for certain assets. The change will tend to benefit larger businesses
for which the value of the AIA can be relatively insignificant. The
AIA threshold, currently £100,000, reduces to £25,000
from April 2012, making this new measure relevant for more businesses
from that time. The reduction in rates of writing-down allowance,
also expected to apply from April 2012, will be another factor that
may influence the decision to make a short-life asset election.
is no change to the time limit for making an election. Nor is there
any change to the restrictions on the types of asset that can qualify:
cars and integral features, for example, may not be the subject of
TIIN13 Enhanced capital allowances (ECA) scheme for energy-saving technologies
First-year plant and machinery allowances are given at 100 per
cent for certain expenditure on
The categories of expenditure qualifying for this faster tax relief
are typically reviewed each year
to ensure that only the most efficient
products are supported.
In 2011, it is proposed to revise
the list of qualifying technologies by including energy-efficient
hand-dryers. The criteria for automatic monitoring and targeting equipment
will also be revised. The date from which the changes will apply will
be announced before the Summer 2011 Parliamentary recess.
TIIN14 Research and development tax credits for SMEs
Legislation will be introduced in Finance Bill 2011 to:
- increase the additional deduction for SMEs to 100 per cent of qualifying R&D expenditure (giving a total deduction of 200 per cent); and
- reduce the deduction available for SMEs under vaccine research relief to 20 per cent.
Legislation will be introduced in Finance Bill
- increase the additional deduction for SMEs to 125 per cent of qualifying R&D expenditure (giving a total deduction of 225 per cent);
- prevent SMEs claiming vaccine research relief;
- abolish the rule limiting the payable R&D tax credit to the amount of PAYE and NICs paid;
- abolish the £10,000 minimum expenditure condition (for all companies); and
- change the rules governing relief for work done by subcontractors under the large company scheme.
Subject to obtaining State Aid approval, and
to further consultation in some instances, the Finance Bill 2011 measures
are expected to apply from 1 April 2011 and the Finance Bill 2012
measures are expected to apply from 1 April 2012.
TIIN15 Oil and gas taxation: supplementary charge
The supplementary charge payable in respect of profits from oil
and gas production in the UK and UK Continental Shelf will increase
from 20 per cent to 32 per cent with effect from 24 March 2011. As
part of the fair fuel stabiliser, the charge will be reduced back
towards 20 per cent if the oil price falls below a set trigger price
(expected to be US $75 per barrel).
Legislation will be introduced
in Finance Bill 2012 to restrict relief for decommissioning expenses
to the 20 per cent rate of supplementary charge. The legislation will
take effect from Budget 2012.
TIIN16 Oil and gas: intangible fixed assets
Legislation to clarify the scope of the intangible fixed asset
(IFA) rules as they apply to an oil licence, or to an interest in
an oil licence, will be introduced in Finance Bill 2011. The legislation
will ensure that the IFA regime excludes all goodwill and any intangible
asset which relates to, derives from or is connected with an oil licence
or an interest in an oil licence.
TIIN17 Bank levy
As previously announced, legislation will be included in Finance
Bill 2011 to introduce the bank levy. The levy is a tax based upon
the total chargeable equity and liabilities as reported in the relevant
balance sheets of affected banks, banking and building society groups
at the end of a chargeable period. The levy will have effect in relation
to periods of account ending on or after 1 January 2011.
rates applying from 1 January 2012 have been increased to:
- 0.078 per cent for short-term chargeable liabilities; and
- 0.039 per cent for long-term chargeable equity and liabilities.
TIIN18 UCITS IV: Management Company Passport
Legislation will be included in Finance Bill 2011 to treat foreign
UCITS funds as not being resident in the UK in cases where they otherwise
might be by virtue of having a UK resident fund manager. This measure
will have effect on and after the date that Finance Bill 2011 receives
TIIN19 Tax Treatment of Specified Investments
Legislation will be included in Finance Bill 2011 to reverse the
unintended tax consequences of an order made in 2010. The order (the Financial
Services and Markets Act 2000 (Regulated Activities) (Amendment) Order
2010) had the unintended effect that certain debt securities may
be unable to qualify for the loan capital exemption from stamp duty,
and that the companies that issue them may be unable to qualify for
the corporation tax securitisation company regulations. The legislation
will have effect in relation to instruments executed on or after 24
TIIN20 Interim CFC reform
A number of interim improvements to the controlled foreign company
(CFC) rules will be made by legislation to be introduced in Finance
Bill 2011. The improvements to be made include:
- introducing exemptions for certain intra group trading transactions and CFCs with a main business of intellectual property where there is little connection with the UK;
- introducing a 3-year exemption for foreign subsidiaries which come within the scope of the rules as a consequence of a reorganisation or change to UK ownership; and
- introducing an alternative to the current de minimis exemption.
The changes will have effect for accounting periods
beginning on or after 1 January 2011.
The CFC rules are expected
to be reformed in full in 2012.
TIIN21 Taxation of foreign branches
As previously announced, an exemption regime for the foreign branches
of UK-resident companies will be introduced by legislation to be included
in Finance Bill 2011. Briefly, the regime will remove the profits
of foreign branches from corporation tax and prevent relief for losses.
The regime will be elective but once an election is made, it will
A number of changes to the draft legislation
published in December 2010 have been announced, including with regard
to the anti-diversion rules, transitional rules and capital allowances.
The regime will also be extended to some life insurance business.
The regime will have effect for accounting periods commencing on or
after the date that Finance Bill 2011 receives Royal Assent, subject
to transitional arrangements.
TIIN22 Gift Aid benefit limits
With effect from 6 April 2011, for individual donors, or for periods
ending after 1 April 2011 in the case of corporate donors, for donations
of more than £10,000, the overriding annual Gift Aid benefits
limit that a donor may receive will increase to £2,500 from
£500. The benefit per gift remains restricted to no more than
five per cent of the gift.
TIIN23 SA Donate
The self-assessment (
SA) Donate scheme is to be withdrawn
from the 2011–12 tax year for repayments made in respect of
earlier years which are paid after 6 April 2012. The scheme, under
which SA taxpayers could choose to donate a tax refund to charity,
has been poorly used and is vulnerable to fraud. It will be superseded
by the proposed new online Gift Aid claim system.
TIIN24 Tobacco products: rates of duty
From 6pm on 23 March 2011, higher rates of duty apply to all tobacco
products imported into, or manufactured in, the UK. Tobacco duty on
cigarettes is also rebalanced to decrease price-based duty, but increase
TIIN25 Fuel duty rates
The fuel duty escalator is replaced by a fuel stabiliser, so when
oil prices are high, fuel duty will increase by RPI only. However,
if the oil price falls below a set
trigger price on a sustainable
basis, fuel duty will increase by RPI plus 1p per litre each year.
The Government believes that a
trigger price of $75 per barrel
is appropriate, but will set a final
trigger price and mechanism
At 6pm on 23 March 2011, the duty rate
for unleaded petrol and diesel fall by 1p per litre.
TIIN26 Carbon price floor
A carbon price floor will be introduced on 1 April 2013. Supplies
of fossil fuels used in most forms of electricity generation will
become liable either to the climate change levy (CCL) or fuel duty
from that date. Such supplies will be charged at the relevant carbon
price support rate, depending on the type of the fossil fuel used,
which will be determined by the average carbon content of each fossil
fuel. The carbon price support rates will reflect the differential
between the future market price of carbon and the floor price. From
1 April 2013, the
carbon price support rates for CCL and, in
the case of oils, fuel duty will be equivalent to £4.94 per
tonne of carbon dioxide.
TIIN27 Climate change levy exemption: certain forms of transport
HM Treasury will be able to suspend part of the climate change
levy (CCL) exemption for certain forms of transport, such as rail
freight and public passenger rail services, where the operator does
not hold a Public Service Obligation. This will apply from 1 April
2011 if State Aid re-approval for continuing with the CCL exemption
is not obtained.
TIIN28 Climate change levy exemption: recycling processes
If State Aid re-approval is not obtained by 1 April 2011, HM Treasury
will be given powers to suspend the CCL exemption for recycling processes
for aluminium and steel.
TIIN29 Aggregates levy rate
The increase in the rate of aggregates levy (AL) from £2
per tonne to £2.10 per tonne that was due to apply from 1 April
2011 will now apply from 1 April 2012.
Subject to EU State Aid
approval, the AL credit scheme in Northern Ireland will be reinstated.
TIIN30 Stamp Duty Land Tax: Reform of Rules for Bulk Purchases
In a measure to be included in the 2011 Finance Bill, the rules
for stamp duty land tax (SDLT) on bulk purchases of residential property
are to be changed. A new relief will apply to transactions where the
effective date is on or after the date on which the Finance Bill receives
Royal Assent. It will not apply unless it is claimed in a land transaction
The relief will apply to linked transactions, where
a purchaser (or a connected person) acquires more than one dwelling
from the same vendor (or a connected person). Where the purchaser
makes a claim:
- the rate of SDLT charged will be determined by reference to the mean consideration for the dwellings (rather than by reference to an aggregate figure), subject to a lower limit of 1 per cent; and
- the dwellings will be treated as residential property, no matter how many dwellings there are (currently if there are six or more dwellings they are not treated as residential property).
Where the linked transactions include both residential
and non-residential property, the non-residential property will be
excluded from the relief and the rate of SDLT applying to the proportion
of consideration attributable to that non-residential property will
be determined by reference to the aggregate consideration for both
types of property.
TIIN 31 VAT: low value consignment relief
low value consignment relief (LVCR) threshold, below
which goods imported from outside the EU are VAT-free, falls to £15
from £18 from 1 November 2011.
The Government will consult
with the EC to limit the scope of LVCR so that it can no longer be
exploited for a purpose for which it was not intended.
is an administrative simplification to cut the costs for businesses,
HMRC, Royal Mail, Express Carriers and consumers all of whom would
otherwise be involved in collecting and/or paying small amounts of
VAT on many low-value packages.
The amount of LVCR has grown
due to more internet shopping and UK companies relocating to outside
Thus, from 1 November 2011, persons importing goods
of a value between £15 and £18 incur VAT on their purchases,
at the same rate and amount applicable to goods purchased in the UK.
This change merely aligns the VAT liability with that for domestic
sales of such goods.
TIIN32 Climate change levy: reform of climate change agreements
The climate change agreement (CCA) scheme ends in March 2013. HMRC
will consult on simplifying a future CCA scheme that will run until
From 1 April 2013, the reduced rate of climate change
levy on electricity will fall from 35 per cent to 20 per cent.
TIIN33 Duty on high and lower strength beers
From 1 October 2011, a new duty known as
High Strength Beer
Duty (HSBD) will apply to beer exceeding 7.5 per cent alcohol
by volume (abv) that is produced in or imported into the UK. It applies
in addition to the existing general beer duty. The HSBD duty will
be 25 per cent of the general beer duty rate at the time of introduction.
Small Brewery Beer relief will not apply to HSBD.
rate of general beer duty will apply to lower strength beer, i.e.
beer exceeding 1.2 per cent abv but not exceeding 2.8 per cent abv.
The reduced rate will be 50 per cent of the general beer duty rate
at the time of introduction.
Beer brewed for home consumption
is exempt from general beer duty and HSBD.
TIIN34 Preventing avoidance: sale of lessor companies
To prevent avoidance of corporation tax, legislation will be introduced
in Finance Bill 2011 to withdraw the option for a company with a leasing
business to elect out of the sale of lessor company charge that may
arise on a change of ownership. In addition, changes will be made
to the sale of lessor company charge to ensure that it continues to
have the intended effect.
The legislation will have effect where
there is a change in ownership or a transfer of business on or after
23 March 2011.
TIIN35 Preventing Avoidance: Stamp Duty Land Tax
In legislation to be introduced in the 2011 Finance Bill, three
changes are to be made to the SDLT anti-avoidance rules. These changes
are intended to have effect for transactions or arrangements entered
into on or after 24 March 2011 but may possibly affect some transactions
or arrangements which span that date. Draft legislation and an Explanatory
Note were published on Budget Day (23 March 2011).
the three changes are as follows:
- in the rules for sub-sales, the Alternative Finance reliefs exception in FA 2003, s. 45(3) will be extended to all the SDLT Alternative Finance reliefs;
- for the purposes of the SDLT Alternative Finance reliefs, it will no longer be possible to qualify as a
financial institution just by holding a Consumer Credit Licence; and
- the chargeable consideration for exchanges involving a major interest in land in
FA 2003, Sch. 4, para. 5 will be changed from market value to the greater of market value and the chargeable consideration as it would be under the normal rules for consideration.
TIIN36 Preventing avoidance: corporate gains degrouping charge
Legislation will be introduced in Finance Bill 2011 to prevent
companies avoiding a corporation tax charge under the degrouping rules
by entering into complex arrangements which seek to exploit a perceived
flaw in the operation of the associated companies exception. This
measure will have effect where companies leave a group on or after
23 March 2011.
TIIN37 Disguised remuneration
Complex anti-avoidance measures are proposed to tackle third party
arrangements (including trusts) that are used to avoid, reduce or
defer tax liability on
rewards of an employment. The measures
also target arrangements designed to avoid restrictions on pensions
tax relief and will specifically include employer-financed retirement
benefit schemes (
A new income tax charge will
be based on the full value provided to employees, whether as cash
or by the provision of assets. That full value will count as a payment
of employment income and the employer will be required to account
for PAYE accordingly.
These measures build on earlier announcements.
Anti-avoidance rules on these lines were announced in the June 2010
Budget and draft legislation was published on 9 December 2010, together
Tax Information and Impact Note. However, that draft
legislation is being revised to reflect concerns expressed during
a consultation process. Amended legislation will therefore be introduced
in Finance Bill 2011, together with a new Explanatory Note that
will clarify how the amended draft rules will work. The
and Impact Note from December 2010 is superseded by the measures
announced on 23 March 2011.
The changes announced now are intended
to limit the impact of the measures where arrangements can be identified
which cannot be used for avoidance purposes. However, this is subject
to an overriding concern to ensure that no new avoidance risks are
created. Possible legitimate arrangements, which may therefore be
outside the scope of the new rules, may include
by group companies, share incentive arrangements and genuine deferred
remuneration arrangements. The intention is also to protect investment
income and gains and to exclude existing pension savings.
the new anti-avoidance measures will apply to rewards made available
to an employee from 6 April 2011. Anti-forestalling provisions also
operate, however, and will catch certain payments (or the provision
of certain assets) between 9 December 2010 and 6 April 2011.
TIIN38 Loan Relationship and Derivative Contracts (Disregard) Regulations
Secondary legislation will be introduced to allow companies to
be taxed on the basis of their economic outcome where:
- foreign currency preference share capital is issued to raise foreign currency finance (effective for accounting periods beginning on or after 1 July 2011);
- an investment is made in a foreign currency partnership or in foreign currency assets through a partnership (accounting periods beginning on or after 1 January 2012); or
- an agreement is entered into to sell foreign currency shares and receive the proceeds at a future date (accounting periods beginning on or after 1 January 2012).
TIIN39 Provisional Collection of Taxes Act (1968); amendments to section 1
As part of the Government's intention to establish fixed-term parliaments,
associated changes to the parliamentary calendar so that sessions
run from spring to spring were announced on 13 September 2010.
will be introduced in Finance Bill 2011 to amend the Provisional Collection
of Taxes Act 1968 (PCTA) to ensure sufficient time for parliamentary
scrutiny of the Finance Bill following the change to spring to spring
The PCTA will be amended so that:
- a resolution will be allowed to have the same statutory effect as an earlier resolution in the same session, so long as the earlier resolution was not passed in the same calendar year;
- resolutions will no longer lose statutory effect at the end of a session, as long as the bill is to carried into the next session (although the condition that resolutions will lose statutory effect when Parliament is dissolved will remain unchanged);
- where the House of Commons does carry-over the bill, then that bill must be re-introuduced in the first 30 sitting days of the new session or the resolution will lose statutory effect; and
- in order to allow time for equivalent parliamentary scrutiny there will now be a maximum period of seven months during which resolutions continue to have statutory effect.
TIIN40 Mutual Assistance Recovery Directive
Legislation will be introduced in Finance Bill 2011 to enable the
UK to implement the Mutual Assistance Recovery Directive (MARD) agreed
to by EU ministers in 2010. Under this directive EU members can provide
each other with assistance in the recovery of tax debts and duties,
which includes service of documents and exchanging information in
connection with the recovery of claims. The new MARD will cover all
entities established and persons residing in the EU.
becomes fully applicable on 1 January 2012 and the UK legislation
implementing the Directive and setting out the detailed rules will
come into force on that date.
TIIN41 The taxation of index-linked gilt-edged securities
Legislation will be introduced in Finance Bill 2011 to amend existing
rules so that gilt-edged securities whose return is calculated by
reference to an index of prices published by the Office for National
Statistics are taxed in the same way as gilt-edged securities linked
to the retail prices index (RPI).
Changes to the rules for revaluing
and indexing certain types of pensions, effective from 2011, may lead
to demand from pension funds for gilt-edged securities linked to the
consumer prices index or other indices of prices.
announced in this measure is designed to ensure that if the Government
decides to issue a gilt-edged security linked to an index of prices
other than the RPI, it will be taxed in the same way as current gilt-edged
securities linked to the RPI.
The legislation will have effect
in respect of index-linked gilt-edged securities issued on and after
the day on which Finance Bill 2011 receives Royal Assent.
TIIN42 Charities: transitional rleif on distributions: repeal of redundant relief
Repayable tax credits on distributions by companies to shareholders
were withdrawn from 1999-2000. A transitional relief was introduced
for charities on distributions received between 6 April 1999 and 5
April 2004. The relief allowed charities to continue to claim repayments
of tax on distributions on a reducing basis. The final date for making
a claim under this provision was 5 April 2006.
relating to the transitional relief is now obsolete and will be repealed
with effect form the date of Royal Assent to the Finance Bill 2011.
TIIN43 Millenium gift aid:Repeal of redundant relief
The legislation which gave relief to donors and charities until
31 December 2000 is now obsolete and is to be withdrawn.
TIIN44 Payroll giving supplement: Repeal of redundant relief
The legislation which paid a supplement to charities on donations
made under payroll giving before 6 April 2006, is obsolete and to
TIIN45 National Savings Bank Ordinary Account interest: repeal of redundant relief
The annual exemption from tax for the first £70 of interest
arising on National Savings and Investment Ordinary Accounts is formally
The exemption is to be removed from the date of
Royal Assent to FA 2011 as part of the goal of simplifying the tax
system. As the press release explains, however,
no one is expected
to be affected by the withdrawal of this relief. This is because
the accounts in question were withdrawn by NSI in 2004.
TIIN46 Stamp Duty: Repeal of Redundant Reliefs and Exemptions
In line with recommendations made by the Office of Tax Simplification
(OTS), the 2011 Finance Bill will repeal the following legislation
on redundant stamp duty reliefs and exemptions:
- FA 1944, s. 45 (assignments by seamen);
- FA 1953, s. 31 (instruments relating to National Savings); and
- FA 1999, Sch. 13, para. 24(b) (instruments relating to the sale of ships or vessels).