On April 10, 2018, the Her Majesty's Revenue and Customs (HMRC) opens a public consultation on an anti-avoidance legislation draft, which tackles tax avoidance by moving UK profits outside the charge of UK tax with offshore trusts and companies. The new legislation is expected to enact in April 2019.
The legislation intends to bring the fragmented and hidden profits within the UK tax charge and require notification of the arrangements to HMRC and earlier payment of tax with two proposals: the legislation specifically focused on these arrangements requiring profits which have been alienated to be added to UK profits (Proposal 1), and requirements to notify schemes and for faster payment of tax in dispute (Proposal 2).
The first proposal targets arrangements in case:
The second proposal introduces a notification of schemes and payment of tax, imposing duty to notify these arrangements on taxpayers if the situation is potentially within the charge.
The legislation aims to target taxpayers, advisers and representative bodies with an interest in trading and professional activities carried on partly in the UK and partly overseas, where UK profits are shifted to other entities resulting in lower UK tax. Responses to the consultation can be done by post or online by June 8, 2018.
Source: UK Gov
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