Offshore companies and the 2008 CGT provisions

We're awaiting the draft legislation on the CGT changes but one area that would need to be consider is the anti avoidance rules for offshore companies. Under the current rules a UK resident domiciliary who owns an offshore company is charged to tax on any gains that the company makes. Essentially if he owns 50% of the shares in the offshore company he's allocated 50% of the gain. The gain apportioned is the gain to the company which is then taxed on the individual. This means that the gain is entitled to full indexation relief from the date of acquisition to the date of disposal. Under the new rules individuals won't be entitled to indexation relief, but companies will. Therefore if this was left unchanged the net effect would be that individuals would be entitled to indexation relief on the disposal of the asset and this would then be taxed at the 18% rate of CGT. Potentially very good for the taxpayer. We'll need to wait and see if this is amended in the draft legislation.