FINANCE ACT 2018
Finance Act 2018 has received Royal Assent and may be found at Bloomsbury’s new legislation service for subscribers; related documents may also be found on the parliamentary website at https://services.parliament.uk/Bills/2017-19/financeno2/documents.html
Operation of tax reliefs in Scotland clarified
HMRC has confirmed in a recent press release that:
- the marriage allowance (ITA 2007, s 55A et seq) will give a tax reduction at 20 per cent;
- Gift Aid will continue to be paid to charities at the basic rate, with Scottish taxpayers able to claim the ‘correct’ amount of additional relief in addition thereto;
- pensions tax relief at source will be at 20 per cent (with no restriction for those who pay tax at a lower rate) at least until a long-term solution can be found and those who pay tax at a rate higher than 20 per cent will be able to claim additional relief;
- Scottish taxpayers who receive a social security pension lump sum will be taxed at the new Scottish starter rate of 19 per cent;
- the tax reduction applied to dwelling-related loans (ITTOIA 2005, s 274A) loans for ‘BTL landlords’ will also remain at 20 per cent in Scotland, as elsewhere in the UK.
The Chartered Institute of Taxation (CIOT) has called the arrangements ‘a pragmatic step’, but cautioned that the widening gap between the Scottish and ‘rest of UK’ regimes would increase the costs and complexity of administering Scottish income tax.
Employment-Related Securities (ERS) Bulletin 26…
HMRC published its 26th ERS Bulletin in March, covering:
- save as you earn (SAYE) savings holiday (the increase from 6 to 12 months for qualifying parental leave) will not start from April 2018 as originally set out in Autumn Statement 2017, but will now apply to all SAYE plans, not just those with qualifying parental leave, from 1 September 2018);
- ERS online data – including that there are roughly 25,000 schemes registered with HMRC;
- common issues (problems) encountered in relation to ER securities;
- top things to remember about EMI and other schemes.
TRUSTS AND INHERITANCE TAX
Trusts and Estates Newsletter
A Trust and Estates Newsletter has been published. Highlights include:
Trusts Registration Service – HMRC says that the ‘soft landing’ for penalties in 2016/17 will NOT apply for 2017/18 registrations. The standard deadlines are:
- trusts and complex estates that have incurred a liability to income tax or capital gains tax for the first time in the tax year 2017 to 2018 will need to complete registration on the TRS by no later than 5 October 2018;
- the trustees of an existing trust that have incurred a liability to tax in the tax year 2017-18 must register accurate and up-to-date beneficial ownership information about the trust, using the TRS by 31 January 2019.
There is still no facility to update the TRS details already submitted to HMRC. This will be addressed at some point in future.
IHT disclosure of tax avoidance schemes (DOTAS) Guidance – Updated guidance on the new IHT hallmark, which came into effect on 1 April 2018, is now available.
Developments for forms R185 – Trustees will need to provide beneficiaries with additional information so that they might claim the new £1,000 trading allowance /property income allowance where appropriate; there is also a new box on the form so that beneficiaries can claim a tax reduction where residential letting finance costs have been restricted.
Wales gains tax independence – land transaction tax
Wales has gained its first devolved tax in the form of land transaction tax (LTT), which replaces stamp duty land tax (SDLT) for all Welsh transactions from 1 April 2018. Any Welsh transactions reported to HMRC on or after 1 April 2018 will be rejected, and reporting agents (typically solicitors) have instead to make LTT returns to the Welsh Revenue Authority (currently in beta).
The Welsh government will have powers to set income tax rates, etc from April 2019.
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