Private Clients - 25 Apr 2017
In a move which garnered little immediate press attention but potentially has a significant impact, the Government today withdrew large swathes of the Finance Bill 2017.
The announcement of a snap UK election means that the current parliament is being dissolved on 3 May 2017. This left a very tight timetable to pass the Finance Bill 2017 through to Royal Assent, which has to be achieved before the dissolution. Running at 762 pages, the Finance Bill 2017 was a weighty publication with plenty of contentious provisions, which would have stretched the normal timetable leading to Royal Assent in the summer. The new timetable was pretty much impossible as the bill stood. However, the number of clauses withdrawn is surprising as they include legislation which was already supposed to be in effect on 6 April 2017 including the deemed domicile rules, cleansing of mixed funds, changes to the taxation of offshore trusts and all other related clauses.
What does this mean? The legislation was always intended to be retrospective so the provisions can be re-tabled when the new Government recommences following the general election with Royal Assent given later in the year. So at present it is expected that the legislation will be introduced as intended and so will still take effect on 6 April 2017.
Of course, this does mean that a new Government could decide not to introduce the provisions, in which case none of the intended changes are legislated and do not take effect. For those not domiciled in the UK this means the concept of deemed domicile for income tax and capital gains tax will not exist. It will be interesting to see whether the rival parties will comment as part of their campaigns on their intentions towards the provisions.
If you are potentially impacted by this please get in touch with your usual Frank Hirth contact.
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