ATT has submitted a response to HMRC on the draft version of the legislation to be included in Finance Bill 2017 which will introduce the new trading and property income allowances of up to £1,000, both of which can be claimed by individuals from 6 April 2017.
In its comments on draft clause 19 and Schedule 5, the ATT has emphasised the importance of clear departmental guidance on the provisions and has highlighted a number of practical aspects for consideration. These include:
- The possible merit of formatting the legislation or the related guidance in clear steps to assist accessibility;
- The practical difficulties in relation to the required elections;
- The potential for the adopted numbering of new sections of ITTOIA 2005 to cause confusion;
- The implications of excluding partnership trades from the definition of ‘relevant trades’;
- The definition of ‘relevant income’ including the significance or otherwise of GAAP principles;
- The interaction of the Nil profit or loss treatment within ‘full relief’ with other provisions including Income Tax, Capital Gains Tax and Inheritance Tax;
- The benefit of incorporating appropriate prompts in tax returns to highlight the inter-relationship of a loss claim with an election not to be given full relief and the definition of relevant income;
- The cliff-edge impact of relevant income exceeding the allowance;
- The apparent distinction in the definition of ‘relevant income’ as between partnership trading income and partnership property business income.