The changing face of the tax landscape
Wednesday, 4 November 2009
I have recently returned from a tax conference. Whilst the image of tax geeks are not like film stars, (Bill Gates refers to himself as a geek, so no disrespect to the Tax Advisers of the world)I can tell you there was more than a hint of excitement in the air! The boffins think there are changes ahead.
Some felt there could be a “smash and grab” policy, which focuses on gather in the cash as fast as possible. Of course, it’s entirely speculation.
Here are some of the thoughts. There is a massive imbalance between Capital Gains Tax (CGT) at 18% and Income Tax at 50%. Many of you will recall CGT being linked to Income Tax rates. Could this change? It was muted that taking the gains now when the gains at historically low rates, rather than wait to future tax rates. Of course, that is always difficult to do…volunteering to pay tax!
Stamp Duty may rise..its 9% in Ireland!
VAT may also rise. Its 19% in Germany.
A fractional increase in Stamp Duty on shares could also be introduced.
As for pensions, there is nothing to stop higher rate tax relief being abolished or limited similar in principle as the 50% limit.
Inheritance Tax has the benefit of the Conservative Manifesto of increasing the limit to £1m by 2014, which may be withdrawn or deferred, yet Potential Exempt Transfers are favourable under current legislation, so there was a view of possible changes.
What about the increase in Environmental taxes linked to property? Could this happen?
All in all, lots of discussion but with the realisation that the country needs your cash, there is now no where to hide…unless of course, you become a tax exile….
In one of the presentations, in a roll play scenario, the assumed question of a client to the tax adviser was “What are rules for being non resident?” The answer not long ago was relatively clear. “183 days and the 91 days on average rule”. However, the reply today is “I don’t know”
There have been staff changes at HMRC and the 91 days is being challenged, because it’s arbitrary and not in statute. So there have been cases that the Commissioners are taking to court. Robert Gaines-Cooper is one such case.
Reed v Clark is another - The Clark, being Dave Clark from the Dave Clark 5. Perhaps “Catch us if you can” is appropriate!
I digress. I was interested in how some forward thinking accountants stood on the harbour handing leaflets out to long distance lorry drivers helping them claim non-residence status. Yet, lorry drivers and pilots seeking non residence are finding qualification rather difficult as the HMRC is out to catch them. Of course, that is a broad generalisation, but if you catch my drift…they may not be singing the Dave Clark song for long :).
So when you say to yourself, I've have had enough of this country and decide to go abroad, hoping to claim non residence status, it's not that simple. Obama wants to catch all the tax dodgers and so does every other large country.
When the tax conference raises the question about the tax landscape…is it changing? My guess it is. And fast. What’s your guess?
posted by Murray Round Wealth Management @ 09:48,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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