Overview

This Finance Bill aims to raise revenue and amend various tax laws in the UK, covering income tax, corporation tax, capital gains tax, excise duties, inheritance tax, and other taxes. It introduces new charges, alters existing rates, and includes anti-abuse rules to prevent tax avoidance.

Description

The bill makes numerous amendments across several tax areas. Key changes include:

• Income Tax: Adjustments to personal allowances and basic rate limits, exemptions for contributions to pension schemes, modifications to childcare exemptions and tax relief, introduction of a limit on income tax reliefs, and provisions for the cash basis of calculating tax for small businesses. New rules for employment income in cases of both UK and overseas duties and for the remittance basis in relation to exempt property are included. Rules about payments on account and arrangements made by intermediaries are also revised.
• Corporation Tax: Changes to the main and small profits rates, a temporary increase in the annual investment allowance, and revisions to loss relief and deductions. New provisions cover tax mismatch schemes, tier two capital, group treasury companies, and community amateur sports clubs.
• Capital Gains Tax: Amendments include the attribution of gains to members of non-resident companies, rules around heritage maintenance settlements, provisions regarding EMI options and entrepreneurs' relief, and a new charge for certain high-value disposals by companies. New rules regarding currency used in tax calculations are also established.
• Other Taxes: The Bill also updates rates and rebates for excise duties (fuel, alcohol, tobacco, air passenger duty, and vehicle excise duty), amends inheritance tax rules, and introduces a General Anti-Abuse Rule (GAAR) to combat tax avoidance schemes. It also contains provisions concerning trusts and the residence test for individuals.

A significant portion of the bill deals with the introduction of an Annual Tax on Enveloped Dwellings (ATED) to be charged on high-value residential properties owned by companies, partnerships, and collective investment schemes. Several reliefs and exemptions are included within the ATED provisions

Government Spending

The Bill's impact on government spending is complex and depends on the success of revenue-raising measures and the extent of tax relief claims. No specific figures for the overall impact are available in the provided text.

Groups Affected

• Individuals: Changes to income tax rates, allowances, and reliefs will affect individuals' tax liabilities. The new residence test and ATED will impact those with high-value properties or international tax implications.
• Companies: Corporation tax rate changes, investment allowances, and the GAAR will affect company profits and tax liabilities. ATED will particularly affect companies owning high-value properties.
• Small Businesses: The cash basis accounting option will impact small businesses' tax calculations.
• Pension Scheme Members: Changes to lifetime allowance and annual allowance will affect pension scheme members.
• Oil and Gas Companies: Decommissioning relief agreements and capital allowance restrictions will impact their tax liabilities.
• Financial Institutions: Changes related to the bank levy and rules concerning alternative property finance will affect financial institutions.
• Charities: Certain charitable companies may be affected by exemptions and reliefs within the ATED provisions.

Powered by nyModel