On 13 July the Government announced that the much anticipated Summer Finance Bill will be introduced shortly after Parliament returns from summer recess in September.
The Government confirmed that this Bill will reintroduce measures originally included in the March Finance Bill which were subsequently dropped when the calling of a General Election meant that there was insufficient time for debate before Parliament was dissolved. Instead a much abbreviated Bill was passed, receiving Royal Assent on the 27 April 2017 and becoming the first Finance Act 2017. This included changes to the operation of IR35 in the public sector, and the tax treatment of optional remuneration arrangements.
The dropped clauses which the Government will be reintroducing after the summer include the following:
- The new £500 pensions advice allowance.
- Reliefs for employer funded legal advice and indemnity insurance.
- The reduction in the money purchase annual allowance.
- The introduction of the new £1,000 allowances for trading and property business income.
- The reduction in the dividend nil rate from £5,000 to £2,000 from 2018-19
- Changes to the taxation of termination payments from 2018-19
The Government have confirmed that any clauses originally announced as having effect from 6 April 2017 will retain this start date when they are brought back. This is because there has been no major change in policy.
Care will be needed in some areas since the Government also announced that technical adjustments and amendments will be made to the previous Finance Bill versions of legislation for seven of the clauses which will have retrospective effect.
Draft provisions for these were published on the 13 July covering the following topics:
· Carried forward losses and counteraction of avoidance arrangements - updated legislation
· Corporate interest restriction - updated legislation
· Deemed domicile: Income Tax and Capital Gains Tax - updated legislation
· Employment income provided through third parties - updated legislation
· Hybrid and other mismatches - updated legislation
· Inheritance Tax on overseas property representing UK residential property - updated legislation
· Substantial Shareholding Exemption: institutional investors - updated legislation