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Autumn Statement: What we expect from the draft legislation being published next week

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29 November 2011

Although today’s Autumn Statement contained very few tax announcements we are expecting draft clauses for next year’s Finance Bill to be issued on Tuesday 6 December.  The release of these clauses follows consultations which took place over the summer.  The clauses will be open for consultation until 10 February 2012 and are then expected to be published in the Finance Bill at the time of the Budget next spring.

Top 10 clauses expected in Finance Bill 2012

  1. Statutory residency test
    This should make it much easier for individuals to work out whether or not they are resident in the UK for tax purposes. A clear set of rules will replace the moving target created by the vagaries of case law.
  2. Changes to the taxation of non domiciled individuals
    The aim is to introduce attractive incentives for non-domiciles to invest in UK businesses, whilst on the other hand requiring non-domiciles to pay more tax in the UK the longer they are here.
  3. Lower Inheritance Tax (IHT) charge for individuals leaving charitable legacies
    This change will introduce a lower rate of IHT for people who leave a charitable legacy of at least 10% or more when they die.
  4. Tax-advanced venture capital schemes
    These changes should significantly increase the take up of both the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT).
  5. Pooling of expenditure on fixtures for capital allowances
    This clause will introduce a requirement for businesses to pool their expenditure on fixtures in a building shortly after acquisition, to allow them to qualify for allowances.
  6. Patent box
    The plan is to introduce a patent box regime from 2013 to encourage and incentivise technology businesses.
  7. Research and Development (R&D) tax credits
    These changes aim to improve the existing R&D tax credit regime and to provide new tax reliefs for larger companies.
  8. Abolition of 43 tax reliefs
    The Office of Tax Simplification has proposed that 43 tax reliefs should be abolished, so we expect an update on these.
  9. High risk tax avoidance schemes
    The Government plan to remove the cash flow advantages for people who use high risk tax avoidance schemes.
  10. HMRC’s information powers being brought in line with international standards
    This will increase HMRCs powers to obtain information where the full identity of the taxpayer isn’t known.

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