Changes to the transfer of asset rules and offshore companies
As we mentioned in this article:
the Government is to propose changes to both the transfer of asset provisions as well as the rules that attribute capital gains of offshore companies to UK residents.
The impetus for this change is from EU. The European Commission say that the provisions are wholly discriminatory as they apply only to non resident companies and not to UK resident companies. They have formally requested the UK to amend the legislation to eliminate the unlawful discrimination.
The Government announced that they will be consulting on changes during 2012 with a view to bringing in changes in April 2013.
Impact
These rules will have a big impact for anyone planning to use offshore companies. After you've clearly established the control of the company and overseas, and that there is no UK trade, the next issue in most cases is to assess how you're affected by the transfer of asset provisions and the CGT attribution rules.
It's likely that there will be substantial changes to these rules which will go further than what has been required by the EU (given the Government crackdown on offshore structuring). One possibility is that they will bring in a treaty override to prevent individuals from relying on the terms of double tax treaties (eg the UK-Singapore or, UK-Mauritius treaty) to avoid the UK's rules.
del.icio.us
Digg
Reddit
Facebook
StumbleUpon
GoogleBookmark
Technorati
Furl