|
|
|
|
|
PDF printer friendly version |
|
BUDGET 2008 NEWS |
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
|
► |
|
Income tax Loss relief restrictions See TM ¶2476 A similar restriction to that imposed on non-active partners is to be applied to individuals trading on their own account. This measure is being introduced to counteract avoidance schemes involving syndicates who are deemed to be trading in investments securing substantial tax losses to shelter other income. Where an individual secures a loss in a trade in which they are active less than 10 hours a week the loss will not be available to offset against other income where it is generated as a result of tax avoidance arrangements entered into on or after 12 March 2008. Where the loss arises under any other circumstance the loss available for relief for a non-active individual will be limited to £25,000 per annum. Neither of these restrictions will apply where the loss is attributable to qualifying film expenditure or a Lloyd’s underwriting business. In order to align the provisions for partners and individuals the definition of non-active partner will also be amended.
Trading stock See TM ¶2670 It has been announced that the long standing rule established in Sharkey v Wernher will be added to statute.
Funds of alternative investment funds See TM ¶2817 To compliment the Financial Services Authority’s (FSA) proposals on Funds of alternative investment funds (FAIF) draft tax legislation has been published. FAIFs will invest in mainly non-qualifying offshore funds, and the tax regime will move taxation on offshore income gains from the fund to the investors.
FAIFs will be exempt from tax on these income gains, and the investor will be chargeable solely to income tax on any gain made on the disposal of units in the fund. These regulations are to be implemented from a date to be announced and are currently in draft form, and may be subject to change.
Savings and investments See TM ¶2875, TM ¶2913, TM ¶3450 The amount of subscription qualifying for relief under the enterprise investment scheme will be increased to £500,000 with effect from 6 April 2008.
HMRC has also announced restrictions on the company activities qualifying under the EIS and Venture Capital Trust regulations. Companies carrying on the activities of shipbuilding, coal and steel production will be excluded from qualifying for EIS and VCT purposes from 6 April 2008 and the restriction will affect shares issued after this date or capital raised. For VCT purposes the changes to the qualifying activities will have no effect for money derived from the investment of money raised before that date.
Restrictions have been announced to the qualifying conditions for enterprise management incentive (“EMI”) share options. Legislation will be introduced to make two changes regarding EMI qualifying companies. Only companies with fewer than 250 full time employees will be eligible to qualify for EMI status and the activities of shipbuilding, coal and steel production will be excluded from qualifying trades. The limit of qualifying options will be raised from £100,000 to £120,000. These measures will take effect from 6 April 2008.
Community investment tax relief See TM ¶2927 The existing legislation prohibits a return of value from the recipient of the investment to the investor in the year preceding the investment, or 5 years following the investment. Retrospective legislation is to be enacted to ensure that deposits from community development finance institution (CDFI) made in the ordinary course of their banking arrangements do not effect the availability of community investment tax relief for the bank holding the deposit.
Company car benefit See TM ¶3298 The previously announced introduction of a lower cash equivalent percentage for low emission cars will be introduced from 6 April 2008. This new rate of 10% will apply to cars with emissions of 120g/km or less. The limit for the 15% rate, by which all other percentages are set, will remain at 135g/km until 2010-2011 when this will decrease to 130g/km.
Child trust funds See TM ¶3695 While all parents will continue to receive a voucher in order to open an account from 6 April 2009 it will not be a requirement that the provider has to be in physical possession of the document I order to open an account. In order to allow paperless transactions the provider will only require the details from the voucher.
Pension changes See TM ¶3830 A number of small changes have been made to the pension regime. Firstly there have been a three technical amendments in relation to increases in pension level in order to ease administration by the pension trustees. Secondly the rules on trivial commutation are being amended to allow pensioners to take “stranded pots” and sums below £2,000. However this will still be subject to the overriding limit of £16,000 in total.
Foreign dividends See TM ¶4286+ Recipients of dividends from non-resident companies are entitled to a non-repayable tax credit provided they own less than 10% of the share capital and the total sums received from all such sources does not exceed £5,000 in the year.
|
|
Let us help you solve |