Author Archive

Offshore is bad, very bad

December 9, 2009

Several opportunities have been provided to taxpayers ‘to come clean’ about the holding of undeclared offshore assets or bank accounts. These include the 2007 Offshore Disclosure Facility, the New Disclosure Opportunity and the Liechtenstein Disclosure Facility. The final opportunity for disclosure ends on 4 January 2010 (unless another final Facility is introduced (again) or the deadline for disclosure is set back (again)).

Having shown taxpayers some carrots, HMRC now would like some fasces.

A consultation document was released today that contains proposals for robust deterrents against taxpayers who fail to disclose their offshore assets or income behaviours.  A requirement for taxpayers to notify all new offshore accounts in high risk jurisdictions is suggested also.  HMRC’s proposals include tax geared penalties for non-compliance and up to 100% penalties for undeclared tax.

Any taxpayer who has not used the New Disclosure Opportunity but has offshore assets or bank accounts to declare can expect a penalty notice in due course.

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Clearance services – stamp duty and SDRT changes

December 9, 2009

Finance Bill 2010 will block a potential stamp duty and SDRT avoidance arrangement that arose following the taxpayer’s victory in the HSBC Holdings case in the ECJ (reported here – click here to view) HMRC can no longer apply the 1.5% stamp duty or SDRT charge on new shares first being issued into an EU clearance service or depositary receipt system.  However, transfers of shares between clearance services and/or depositary receipt systems (whether or not EU) are exempt from stamp duty and SDRT.  This is intended to avoid a double charge.

The HSBC decision coupled with the exemption provided the opportunity to avoid stamp duty and SDRT by routing shares intended for a non-EU clearance service or depository receipt system through an EU clearance system or depository receipt system.

This exemption on transfers between clearance services and depositary receipt systems will now not apply.  where there is a scheme between an issuing company and a clearance service or depository receipt issuer under which shares are issued to an EU clearance service or depositary receipt system (without the payment of the 1.5% charge) and subsequently transferred to a non-EU clearance service or depositary receipt system.  This change was first announced on 1 October 2009 and will be effective as of that date.

Bankers’ bonus tax

December 9, 2009

In a widely anticipated move, the Chancellor has introduced, with effect from today, a one-off  bank ‘supertax’ of 50 per cent on any individual discretionary bonus paid by a bank to an employee that is over £25,000.

This is to be paid by the bank, not by the bank employee (although the employee will, of course, also have to pay, income tax at their top rate on any bonus they receive).

We await the draft legislation.