The Budget
2005 - Corporate & Business Tax
Research institute
spinout companies
If an employee of a research institution (RI) acquires shares in a spinout
company to which the RI has transferred intellectual property, an income
tax and national insurance charge could arise under the employment-related
securities provisions. This has contributed to a significant reduction
in the number of new spinouts. The value of intellectual property on transfer
to the spinout company will be disregarded from 2 December 2004, thereby
avoiding an immediate tax and NIC charge. For spinout companies set up
before 2 December 2004, there will be an opportunity to elect before 15
October 2005 that income tax and NIC liabilities will not be payable unless
and until the company is successful.
International accounting
standards
Technical amendments will be made to the Finance Act 2004 legislation
and to regulations made in December 2004. These reflect recent developments
in both IAS and UK Generally Accepted Accounting Practice and correct
some errors and omissions in the previous legislation. The changes will
generally have effect for periods beginning on or after 1 January 2005,
the earliest date from which companies are permitted to use IAS to draw
up their accounts.
An anti-avoidance measure will also be introduced
to prevent companies taking advantage of the announcement made in the
Pre-Budget Report that transitional adjustments would be deferred until
2006 at the earliest. This will apply from 14 December 2004.
Film tax relief
Tax relief for low budget qualifying British films (s48 relief), which
was due to expire on 1 July 2005, will be extended until 31 March 2006.
This extension will enable films to qualify for current tax relief, where
the first day of principal photography is before 1 April 2006 and the
film is completed before 1 January 2007. Acquisition relief will continue
to be available for films that meet these conditions and are acquired
before 1 October 2007.
The Pre-Budget Report announced measures
to counter tax avoidance schemes based on film production and acquisition.
These included schemes which allowed relief to be claimed more than once
on a single film, used arrangements to defer tax for over 15 years and
enabled partnerships to obtain loss relief for money that was not fully
at risk. The relevant legislation will generally be effective from 2 December
2004.
Renovation of business
premises
A new Business Premises Renovation Allowance scheme will provide 100%
first-year allowances for capital expenditure on renovating or converting
vacant business properties in designated disadvantaged areas. The scheme
will apply if the EU grants state aid approval.
Next
- Capital Taxes
|
