The Budget
2005 - Tax Avoidance
Double taxation relief
for trade receipts
Legislation will clarify the amount of double taxation relief that will
be given when foreign tax is paid on income that is a trade receipt for
UK tax purposes or on other income that is computed in a similar way for
UK tax purposes. The changes will generally take effect from 16 March
2005 for companies and from 6 April 2005 for individuals.
Avoidance through
arbitrage
From 16 March 2005, legislation will counter tax avoidance using arbitrage
schemes that involve hybrid entities or hybrid instruments.
Double taxation relief
anti avoidance
With effect from 16 March 2005, legislation will counter arrangements
designed to give rise to excessive double taxation relief claims.
Corporate intangible
assets
Changes to the legislation covering corporate intangible assets, such
as goodwill, will amend the related party rules and market value rules
from 16 March 2005. Payment entitlements under the single payment scheme
for farmers will not count as eligible replacement assets for the purposes
of capital gains rollover relief (or hold-over relief in the case of depreciating
assets) when acquired by companies. This provision will apply to acquisitions
of payment entitlement from 22 March 2005.
Financial avoidance
Eight avoidance schemes that have been disclosed to the Inland Revenue
under the disclosure rules introduced in Finance Act 2004 will be blocked
by legislation. They include schemes based on stripped corporate bonds
and corporately owned capital redemption bonds.
Next - National
Insurance Contributions
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