Tax Day: points for private client practitioners

02 December 2021

Tuesday was the UK’s second so-called “Tax Day” and, as promised earlier this month, the Government has published various papers, responses to consultations and calls for evidence on a diverse range of topics from small brewers relief and landfill tax to general matters of tax policy, collection and enforcement.


Some initial points to note for private client practitioners are as follows.

  • The Government has considered the Office of Tax Simplification's (OTS) review of the design of inheritance tax (as well as the recent reports by the Organisation for Economic Co-operation and Development (OECD) and the All-Party Parliamentary Group on Inheritance and Intergenerational Fairness) and confirmed that it will not make any of the changes suggested. This confirmation provides welcome clarity for practitioners, at least for the time being.
  • The Government has also considered the OTS’s review of capital gains tax (CGT) and, whilst accepting some of the more technical recommendations, will not make any fundamental changes. Unlike with the Government’s response on inheritance tax, the Government has noted that it “will keep the CGT system under review to ensure it is simple and efficient” and highlights some areas for further consideration including, for example, a review of enterprise investment scheme relief.
  • The technical changes include:
    • extending the reporting and payment deadline for UK property related CGT charges from 30 to 60 days (which was announced as part of the autumn Budget); and
    • extending the “no gain no loss” window on separation to the later of (i) the end of the tax year at least two years after the separation event; or (ii) any reasonable time set for the transfer of assets in accordance with a financial agreement approved by a court or equivalent process in Scotland. This will make life much simpler when transferring property after a divorce. The Government will consult on the detail of this proposed change next year.
  • The Government has confirmed that the Taxation of Chargeable Gains Act 1992 will be amended so that CGT roll-over relief will be available for limited liability partnerships and Scottish partnerships on an exchange of interests in land held jointly by their members or partners (which is the current position for English law general partnerships).
  • The Government has now published a technical consultation and draft regulations setting out how it will implement the OECD’s Model Mandatory Disclosure Rules. These will continue a form of cross-border reporting regime, similar to the existing DAC6 regime (which applies across the EU but was also implemented by the UK), for instances where, for example, arrangements and structures are put in place to circumvent the Common Reporting Standard.
  • The Government has established a HM Revenue and Customs (HMRC) stakeholder forum to consider how to tackle offshore tax non-compliance as part of HMRC’s “No Safe Havens” strategy. This is clearly still an area where HMRC hope to increase their tax take.
  • The Government has published a consultation into the stamp duty land tax (SDLT) reliefs for purchases of mixed property and multiple dwellings due to the Government’s belief that these are being exploited by some purchasers. The proposals include an apportionment basis for charging SDLT in relation to mixed property and restricting multiple dwellings relief to situations in which the dwellings are purchased for “a qualifying business use”.
  • The Government has considered the possibility of collecting income tax more regularly for liabilities that currently form part of the self-assessment process. Although there will be no change during this Parliament, collecting income tax more regularly remains the government’s “long-term ambition” and HMRC will be conducting a proof-of-concept pilot scheme to see whether changes are feasible.
  • The Government will consult on how to formalise an existing concession that seeks to disapply income tax for trustees and personal representatives where their only source of income is savings interest that gives rise to a tax liability of less than £100. With any luck, HMRC might be persuaded to include all income within the relief and not just savings interest.
As part of Tax Administration and Maintenance Day the government has set out further detail on its work to deliver a modern, simple and effective tax system - which helps taxpayers get their tax right the first time