On 30 November 2021, as part of the UK government’s Tax Administration and Maintenance Day (‘TAMD’), HMRC and HM Treasury made tax policy announcements and issued a number of tax documents as part of their work to deliver a modern, simple and effective tax system. The government also formally responded to three reports issued by the Office of Tax Simplification in relation to capital gains tax and inheritance tax.
The day’s headline announcements relating to the taxation of individuals are set out below.
The OTS previously made various recommendations to simplify CGT. The Chancellor has responded stating that the government will implement some of the OTS’s recommendations and will consider others. The noteworthy points being implemented or considered are:
The government intends to expand the scope of CGT rollover relief to include exchange of land interests held jointly by partners/members of LLPs and Scottish partnerships. Similar rules already apply to English partnerships.
The Chancellor’s letter also includes a response to the OTS’s second report on inheritance tax. This report suggested the government consider various key aspects of the inheritance tax rules, such as how and when business property relief applies and the taxation of lifetime gifts (our client briefing note summarising the OTS’ recommendations is here). The Chancellor has stated that the government will not proceed with any changes at the moment, though will bear in mind the points made if the government considers inheritance tax reform in the future.
The government consulted on introducing a system to require taxpayers to calculate their tax due during the tax year, and pay the tax arising in instalments throughout the year. The government have announced that no changes to the timings of tax payments will be made in the current Parliament. The response notes that the “majority of respondents felt the challenges of more timely payment of tax currently outweighed the benefits”. A working group is to be put together to work on a voluntary in-year calculation proof-of-concept pilot. In the meantime, the Budget Payment Plan is to be given more prominence, which is intended to assist taxpayers who are struggling to pay their taxes.
The government is consulting on introducing a mandatory disclosure regime to apply where taxpayers seek to avoid CRS reporting and certain other transparency measures. The regime, based on OECD’s Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures, will require taxpayers and intermediaries to disclose information on prescribed arrangements and structures to HMRC. The proposed regulations will replace similar EU rules introduced previously.
Find out more...
This note reflects the law in force as at 30 November 2021 and the UK government’s announcements of 30 November 2021. Please be aware that this note does not cover all aspects of this subject. To find out more about any aspect of the above, please discuss with your usual Deloitte contact. If you do not have a usual contact, please contact Michelle Robinson. For further information visit our website at www.deloitte.co.uk.