Draft FB17 Clause 19 Schedule 5: Trading and property allowances - ATT comments

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.

Techncial Team

Posted in: Submissions