We always knew that Tuesday 6 December 2011 would see quite a lot of interesting UK tax code developments where international issues were concerned – however, it’s not until I’ve actually sat down and skim read through all of the press releases, and absorbed the tweets and early stage reviews of many other peers that it becomes clear just how much has been included today that is going to keep me busy! The business case I need to put together to secure the recruitment of an assistant has basically been written for me......

So let’s take a look at some of the highlights:

·       The statutory residence test that was scheduled to be introduced from 6 April 2012 has been put back by 12 months to 2013. HMT has said that they ‘want to get it right’ but this means another year of uncertainty for employers, high net worth individuals and advisers alike.

·       We were waiting for the final CFC draft legislation. We have more proposals, a brand new gateway test into the main rules, redrafted exemptions, and further draft legislation still to be written. Much of the proposals look just as complex as before with lots of subjectivity involved. HMT still intend to get this new CFC regime into the 2012 Finance Bill, but my own view is that deferral until 2013 is now a possibility.

·       New proposals would allow non UK doms to bring untaxed income or gains into the UK without triggering a remittance based tax liability on the proviso that the funds are used to invest in UK business. This is an attempt to stimulate the UK economy with foreign funds.

·       The ‘transfer of assets abroad’ income tax anti avoidance provisions and s.13 TCGA 1992 close company gains provisions are to be reviewed by HMT. This is in light of a recent EU directive that deems such legislation as being contrary to EU law in their current form. I expect some commercial substance elements to be introduced into the legislation to bring these draconian rules into the era of the global economy.

·       UK residents with foreign exchange gains on non UK currency bank accounts will be exempt from UK tax on those gains from 6 April 2012. The downside is that losses won’t be allowable – of course!

·       Players and staff involved in the UEFA Champions League final in 2013 at Wembley will not be subject to UK income taxes on their game remuneration. I must see if my agent can get me a transfer from Welton Rovers to Real Madrid in time for the 2012 – 2013 season.....

·       In certain circumstances farmers who have disposed of their rights to the EU single farming payment will be able to rollover any gains against qualifying farming assets. Claims will be allowed against disposals of such rights from 1 January 2009.

·       Further consultation updates on R&D tax relief and the Patent Box. Both are extremely important for inbound investors and also existing businesses considering locating economic activities abroad.

·       Details on the UK – Swiss withholding tax agreement from October 2011 are published and will be enacted in FB2012.

·       There are also further tweaks to the ‘Worldwide Debt Cap’ legislation. This legislation is only applicable to ‘large companies’ (as per the EU definition of large).   

There is a huge amount of draft legislation, proposal documentation and consultation paperwork to get through to really get into some of these issues, but I am in no doubt that once again there is a lot of change for SMEs who are doing business abroad.

In future weeks we will examine some of these topics in more detail. If there is something you want to read more on then get in touch and let me know!