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Pre-budget report consultation documents published today
Following the Pre-Budget Report on 9 October 2007, the Treasury has today published four consultation documents.
Income shifting: a consultation on draft legislation
The Pre-Budget Report set out the Government's view that income shifting - through which one individual can artificially shift part of their income to another person who is subject to a lower rate of tax - leads to unfair outcomes.
Comments are invited on draft legislation, and accompanying guidance. The legislation would apply only where a tax advantage is gained through non-commercial arrangements and where the shifted income is in the form of a company distribution or share of partnership profits. The legislation aims to ensure that genuine commercial transactions are not affected, and that administrative burdens are minimised.
Securing a sustainable future: a consultation on the North Sea fiscal regime
The consultation seeks views on a package of proposed reforms to the North Sea fiscal regime. These underline the Government's commitment to promoting a healthy and prosperous oil and gas industry for the benefit of the whole of the UK.
The reforms will incentivise investment, through providing certainty for investors, helping facilitate asset trades, reducing the impact of the fiscal regime on investment decisions and removing fiscal anomalies.
Paying a fairer share: a consultation on residence and domicile
The Pre-Budget Report announced a package of measures to reform the residence and domicile tax system that acts as transitional tax measure for people moving to the UK from abroad.
The consultation document asks for views on the implementation of the reform package, and consults on whether there is a case for any further changes to the rules on the treatment of non-domiciles to be considered, seeking views on whether proposals have merit and whether the Government should consider pursuing them.
Principles-based approach to financial products avoidance:
a
consultation document
The consultation proposes replacing existing detailed anti-avoidance legislation in two areas of financial products with principles-based anti-avoidance rules. The two areas concerned involve disguised interest (where taxable interest is converted into exempt income or a capital gain) and sales of income streams (where taxable income is converted into something that may be treated by tax law as capital).
The principles-based approach permits simplified legislation, which is included in draft in the consultation document, and is expected to reduce the compliance burden for businesses and their agents.
NOTES FOR EDITORS
Income shifting: a consultation on draft legislation
1. The 2007 Pre-Budget Report said: "The Government will be launching a consultation shortly on draft legislation to prevent such income shifting, with the intention that this legislation will take effect from 2008-09."
2. The consultation document can be found at:
http://www.hm-treasury.gov.uk/consultations_and_legislation/income_shifting/consult_income_shifting.cfm
3. The consultation closes on 28 February 2008.
Securing a sustainable future: a consultation on the North Sea fiscal regime
4. Discussions with the North Sea oil and gas industry were launched by the Chancellor at the 2005 Pre-Budget Report.
5. Alongside Budget 2007, the Government published "The North Sea fiscal regime: a discussion paper". This summarised the discussions held to that point and set out Government's initial conclusions.
6. Today's consultation "Securing a sustainable future: a consultation document on the North Sea fiscal regime" sets out a proposed package of reforms that will encourage investment, increase certainty, remove anomalies, improve stability and simplify the fiscal regime whilst reducing the administrative burden it imposes.
7. The consultation document can be found at:
http://www.hm-treasury.gov.uk/consultations_and_legislation/north_sea/consult_northsea_future.cfm
Draft legislation for measures in the proposed package of reforms
can be found on the HM Revenue and Customs website at http://www.hmrc.gov.uk/oto/fiscal-regime.pdf.
8. The consultation on the proposed package will close on 31st January 2008. Further discussions on the outstanding issues will run until the end of June 2008.
Paying a fairer share: a consultation on residence and domicile
9. The 2007 Pre-Budget Report announced the completion of the review of the residence and domicile rules and set out a number of measures to reform the current system, effective from April 2008.
10. The consultation document can be found at:
11. The consultation closes on 28 February 2008.
12. Draft legislation will be published for consultation later this month.
Principles-based approach to financial products avoidance:
a
consultation document
13. In the 2007 Pre-Budget Report the Government announced it would consult later in the year on the possibility of introducing principles-based legislation in the areas of disguised interest and income stripping (now termed sales of income streams). The new legislation would enable the repeal of existing detailed anti-avoidance rules. The new rules would be shorter and would reduce compliance costs for business.
14. The document invites consultation, including via an "open day" run by HMRC and the Treasury, to ensure the measures are properly targeted and do not catch genuine commercial transactions.
15. The discussion document can be found on the HMT website at http://www.hm-treasury.gov.uk/consultations_and_legislation/financial_pr
oducts_avoidance/consult_financialproducts_avoidance.cfm
16. Non media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 0207 270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk
17. This press release and other Treasury publications and information are available on the Treasury website at http://www.hm-treasury.gov.uk. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.
