With immediate effect

UK residents and non-UK residents will have 60 days in which to file a CGT return on the disposal of residential property, rather than the previous 30 days.

With effect from 1st April 2022

A new levy (another word for tax but not using the word “tax”) is to be imposed to help fund the costs to the Government and its Agencies, e.g. primarily the NCA and HMRC, of fighting economic crime. From 1st April 2022, any business registered for anti-money laundering purposes, whether via a professional body e.g. ICAEW, or directly with HMRC will be liable to the new Economic Crime (Anti-Money Laundering) Levy.

This aims to raise £95m in 2022/3. The only good news is that firms whose UK revenue is below £10.2m will be exempt (for now). We do not have to concern ourselves with whether our revenue is UK or not for this purpose, but it would be a nice problem to have.

In addition, the rate of Residential Property Development Tax (RPDT) (see our previous briefing in September), which comes into effect on 1st April, and which will affect those businesses making more then £25m p.a. of profit, has been announced and will be 4%.

With effect from 6th April 2022 (my 60th Birthday ☹)

The tax rate is increasing on dividends. This was already announced with the increase in NICs announced over the summer (see our previous briefing in September). The new rates are, once personal allowance and the £2,000 dividend allowance are exhausted:-

  • Ordinary dividend rate – 8.75%
  • Upper dividend rate – 33.75%
  • Additional dividend rate – 39.35%

For the future

A consultation document has been released on the concept of re-domiciling companies to and from the UK. This occurs in a number of jurisdictions but not in the UK, save in the case of the creation or merger of SEs[1]. This is not the same as changing tax residence which is achieved by moving central management and control. But redomiciliation is likely to have that as a consequence.

Pros, if you bring a company onshore you can save offshore costs (which we know some clients will like). Cons, at present the location of assets rule for inheritance tax is the place of incorporation, so you can have a UK tax resident company which is a non-UK situs asset for inheritance tax purposes. However, if you were to re-domicile the company it would become one incorporated in the UK and therefore UK tax resident by default and a UK situs asset for inheritance tax purposes.

And some reminders

There are some tedious technical changes being made, the first in respect of removing any CGT charge on a person whose assets have been deemed dormant under the “Dormant Asset Scheme”[2] until that person receives the proceeds of the assets seized. Our point is, please check whether you, your family, your dearly departed, have accounts which may have been forgotten about. If you know that “Hetty always paid the man from the Pru”, write to the Pru. There may be an asset which is there to be traced.

The other is in some tidying up of the VAT rules for Freezones. These are VAT free, customs and excise duty free, SDLT free and generally tax free zones with 100% buildings allowances, five year rates holidays etc. should soon be up and running if they are not already. They are located in

  • East Midlands Airport
  • Felixstowe and Harwich
  • Humber
  • Liverpool City Region
  • Plymouth and South Devon
  • Solent
  • Teesside
  • Thames

References

[1] Societas Europa, a EU version of a PLC, based on the German model e.g. requires employee participation at Board level.
[2] Ultimately these assets would go bona vacantia to HM Treasury (only land reverts to The Crown). The Dormant Asset Scheme allows HM Treasury to appropriate these assets at an earlier time, but if an owner appears, then they should be reimbursed or compensated by HM Treasury.

Leave Comments

Nunc velit metus, volutpat elementum euismod eget, cursus nec nunc.