Within the consultation paper, HMRC have highlighted a number of schemes which market themselves as being able to mitigate stamp duty using a loophole in “transfer of rights” rules, in which a property is purchased by one part and immediately passed onto another before completion.
It is reported within the consultation paper that some schemes have claimed no stamp duty is payable as the initial transaction is disregarded in line with the transfer of rights rules, while there was no consideration paid for the distribution of the property thereafter.
However, HMRC have said that this can be challenged, stating that it does “not agree that the distribution of the property occurs at the same time as the completion” and is therefore not covered by the rules; adding that there are “very good prospects that ‘subsales’ schemes of all types seen to date... can be successfully challenged”.
HMRC continues to say: “A number of promoters of stamp duty land tax avoidance claim that the particular wording of the current rules can be exploited to reduce or eliminate stamp duty land tax.
“HMRC and, we believe many others, consider that the rules when read correctly do not contain the perceived loopholes claimed by promoters of this abuse. It is, however, desirable to improve the legislation to stop such claims being made in the first place.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 659 )Figures released by the Office for National Statistics have revealed that the annual inflation rate, as measured by the Consumer Price Index (CPI) fell last month to 2.4 percent, compared to 2.8 percent in May.
It is believed that the rate of inflation – which indicates how fast prices are rising compared to the previous year – is slowing as a result of lower food, fuel and clothing costs; with the Office for National Statistics reporting that clothing and footwear was the biggest contributor to the recent fall in inflation, with prices being 4.2 percent lower.
Although inflation is still above the two percent target set by the Bank of England, CPI has been falling steadily since peaking at 5.2 percent in September last year; and it is widely believed that this latest fall could prompt the Bank of England to inject additional money into the economy via its quantitative easing programme.
The Economic Secretary to the Treasury, Chloe Smith said of the latest figures: “Inflation has more than halved since September, meaning a little less pressure on family budgets.
“This lower inflation should support high street spending and growth in the economy in the months to come.”
In addition to a fall in CPI, the Office for National Statistics have also revealed via their latest figures that the Retail Prices Index – which unlike CPI includes housing costs – has also fallen from 3.1 percent in May to 2.8 percent last month.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 571 )According to a new report, the economy could lose almost £10 billion if the Government presses ahead with controversial plans to introduce regional pay in the public sector,
Chancellor George Osborne raised the prospect of regional pay earlier this year, however, a study for the TUC has found that there is "no economic case" for pressing ahead with the divisive measure, claiming there is no evidence that the pay of workers such as teachers, nurses and dinner ladies was preventing local firms from hiring staff.
The report goes on to say that within a worst case scenario where the pay of millions of public servants who live beyond London and the South East is brought down to private sector levels, as many as 110,000 jobs could be lost across England and Wales, and the cost to local economies would be £9.7 billion a year.
The report went on to say that on a best case scenario the introduction of local pay rates for public servants would see the creation of only 11,000 jobs, the report found.
Following the report, the TUC general secretary Brendan Barber said: "Quite apart from the huge hit that public sector workers would have to take in their pockets if pay in parts of the UK is held down to 'allow' the private sector to catch up, this report shows that the move would also prove hugely damaging to local economies.
"Despite the concerns being voiced by MPs in the parts of the UK most likely to be affected by the introduction of local pay rates, the Government has so far refused to rule out this move that would hit public sector workers and their families - who are already feeling the financial pinch as they suffer the effects of a lengthy pay freeze - very hard."
The findings of the report comes ahead of pay review bodies reporting back to the government, later this week, on the effect of introducing regional pay rates.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 630 )The Bank of England and the Treasury have today (July 13th) unveiled details of the “funding for lending” scheme, which aims to boost lending to businesses and households.
Under the scheme, the Bank of England will make cheaper funds available to banks, equivalent to five percent of the amount they currently lend; and it has been announced that as part of the new scheme, if High Street banks are able to increase the amount they lend to consumers and businesses through loans and mortgages, they will be able to borrow more, with no upper limit.
Following the announcement of the scheme, the Chancellor George Osborne said: “Today's announcement aims to make mortgages and loans cheaper and more easily available, providing welcome support to businesses that want to expand and families aspiring to own their home.”
He added that the initiative would "inject new confidence into our financial system and support the flow of credit to where it is needed in the real economy - showing that we are not powerless to act in the face of the Eurozone debt storm.”
The Funding for Lending scheme is set to begin in August of this year, and will remain open for an eighteen month period.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 513 )HMRC have issued new guidance to clarify how adviser charging can be applied for personal and group pension schemes; with the new guidance addressing issues raised when the government launched their draft guidance.
Previously, issues had been raised about HMRC’s proposed approach, with fears that it could complicate shopping around at retirement. This is because, under previous plans, if an individual decided to switch provider when they brought an annuity, the tax free cash is paid by their original provider.
As a result, the new provider would have been required to contact the previous provider and request they pay a portion of the adviser charge from the tax free cash to the adviser.
However, the revised guidance now states: “A registered pension scheme might make a payment to a financial adviser for the cost of pension advice that is given to the member by the financial adviser in relation to the pension scheme.
“Such pension advice might be in connection with the suitability of fund choice, asset allocation, pension provider, pension taxation or checking against statutory limits.”
The guidance goes on to say: “Also, the advice could cover how to maximise income from the pension fund at retirement or how to maximise the return on existing pre-retirement pension fund or more general advice on the payment outcomes/risks of respectively choosing the type of pension to be taken; scheme pension, lifetime annuity or drawdown.”
As a result, if an adviser charged £500 for advice on the pension options for a member with a £100,000 fund, a tax-free lump sum of £25,000 will still be available, with the charge taken from the remaining £75,000 after it is passed to the annuity provider.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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