Spring Budget 2017: tax loopholes closed with effect 8 March 2017

The following five measures announced in the Budget 2017 by Chancellor Philip Hammond are effective immediately, with a particular focus on curbing tax avoidance activity

Corporation Tax and Income Tax: tax treatment of appropriations to trading stock: Removes the ability for businesses to convert capital losses into trading losses. The government says this move will address an unfairness in the current rules that can be exploited for avoidance.

Income Tax and Corporation Tax: disposals of land in the UK: This measure amends the ‘Profits from Trading in and Developing Land in the UK’ legislation introduced in Finance Act 2016 to bring all profits recognised in the accounts on or after 8 March 2017 into corporation tax or income tax, regardless of the date the contract was entered into.

Insurance Premium Tax: anti-forestalling: This measure repeals the current Insurance Premium Tax (IPT) anti-forestalling legislation, and introduces new legislation. The new implementation arrangements for the rate rise announced at Autumn Statement 2016 mean that some of the current anti-forestalling legislation rules are no longer needed or require some updating and the legislation has been amended accordingly.

Promoters of Tax Avoidance Schemes: associated and successor entities rules: Measures introduced to ensure those marketing tax avoidance schemes cannot circumvent the Promoters of Tax Avoidance Schemes (POTAS) regime first announced in the 2013 Budget by re-organising their businesses.

Qualifying recognised overseas pension schemes: charge on transfers: Introduces a 25% charge on transfers to qualifying recognised overseas pension schemes (QROPS) as part of its measures against tax avoidance. This measure is effective from 9 March 2017.

Calum Fuller |Assistant editor, Accountancy magazine (up to 2018)

Calum Fuller is former assistant editor of Accountancy magazine and Accountancy Daily, published by ...

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