Blink and you might miss them, but hidden deep in the Autumn Statement were some interesting and potentially wide reaching tax changes:
- New tax allowance for property and trading income – first announced at Budget 2016, the government intends to create two new income tax allowances of £1,000 each, for trading and property income. What this means is that individuals with trading income or property income below the level of the allowance will no longer need to declare or pay tax on that income
- Bringing non-resident companies’ UK income into the corporation tax regime – the government is considering bringing all non-resident companies receiving taxable income from the UK into the corporation tax regime. The government intends to consult on the proposed changes at Budget 2017. The aim is to deliver equal tax treatment ensuring that all companies are subject to the rules which apply generally for the purposes of corporation tax, including, for example, the limitation of corporate interest expense deductibility and loss relief rules.
- Foreign pensions – the tax treatment of foreign pensions is to be more closely aligned with the UK’s domestic pension tax regime. The aim is to bring foreign pensions and lump sums fully into tax for UK residents, to the same extent as domestic pensions. The government also intends to stop new contributions to specialist pension schemes for those employed abroad, extend the taxing rights over recently emigrated non-UK residents’ foreign lump sum payments from funds that have had UK tax relief (from 5 to 10 years), align the tax treatment of funds transferred between registered pension schemes, and amend the eligibility criteria for foreign schemes to qualify as overseas pensions schemes for tax purposes.
If you or your clients are likely to be affected by any of the proposed changes, or you would like to understand more about the likely impact of these changes, please do give us a call.