Summer Budget 2015 so what else might we see in the Budget

01 July 2015

Gary Heynes

And finally, a list of measures that have previously been announced, and could very well make an appearance when the Chancellor makes his speech next week…

Non-domiciliaries: a minimum claim period for the remittance basis charge

This was the subject of an HMRC consultation, which closed last April, into reducing the opportunity for non-doms to minimise their tax liability by their only paying the remittance basis charge on an irregular basis. HMRC was seeking views as to how a minimum payment period of three years for the charge might apply, and this could be picked up in the forthcoming Budget as it would be a source of revenue for the exchequer.

IHT and Trusts

Following extensive consultation, draft legislation was published last December including, amongst various provisions, new rules about same day additions to multiple trusts. It was originally expected that this would be included in Finance Bill 2015. Following consultation on the draft legislation there have been a number of helpful changes made and the forthcoming Budget may be used as a vehicle to announce when the final version of the legislation will be enacted – perhaps it will be in the next Finance Act?

Finance Act 2015 - measures deferred to future Finance Bills

A House of Commons Written Statement identified a number of clauses intended for Finance Bill 2015 which were deferred:

  • a new tax exemption for travel expenses of members of local authorities;
  • a new statutory exemption from income tax for trivial benefits in kind;
  • simplifying the link company requirements for consortium claims under corporation tax;
  • a large volume of amendments to the loan relationships and derivative contracts rules, including changes to more closely align the tax treatment with the accounting treatment, a new corporate rescue exemption to exempt credits arising from the release or ‘substantial modification’ of debts where the debtor is in severe financial distress (the new exemption was intended to apply from 1 January 2015, but it is uncertain whether this commencement date will be retained when the exemption is finally made law) and certain anti-avoidance measures; and
  • changes to the rules for EIS and VCT schemes which are subject to EU State aid approval.

The Government intends that these measures will be legislated at the earliest opportunity in the new Parliament. Some of these might therefore be mentioned in the forthcoming Budget.

Also deferred was the Direct Recovery of Debt (DRD) legislation. Announced at Budget 2014, consultation followed and a summary of the consultation responses was published in November 2014, many of which focused on the need for robust safeguards. Draft DRD legislation was contained in the Finance Bill 2015 but omitted from the Finance Act 2015 – it might be that there wasn’t adequate time for parliamentary debate regarding the safeguards? It is anticipated that the DRD legislation will be enacted in the next Finance Act. It might therefore be mentioned in the forthcoming Budget.

‘Future tax changes’ announced at Budget 2015

A considerable number of ‘future tax changes’ were announced at Budget 2015. Some of these changes could be picked up or amended in the forthcoming Budget, possibly being subject to consultation, for example:

  • a new personal savings allowance;
  • bad debt relief for peer-to-peer lending;
  • banks’ customer compensation expenses to be non-deductible for corporation tax purposes; and
  • ISA savers to be able to withdraw and replace money from their cash ISA without it counting towards their annual ISA subscription limit for that year; and
  • new measures to tackle serial tax avoiders and a specific tax geared penalty to apply to cases subject to the GAAR