On March 23, the UK Government announced its budget and tax proposals for the UK tax year April 2011–April 2012. Significant changes include:

  • Corporation Tax—Corporation Tax, payable by UK tax resident companies and the UK branches of non-UK resident companies, is to be reduced to 26% from April 2011, and it will then drop by 1% each year to 23% from April 2014.
  • Double Tax Treaties—New measures have been announced to combat the use of the UK’s double tax treaties to avoid UK tax. These will target both UK residents (individuals, trustees and companies) who use tax avoidance schemes and overseas residents who claim benefits to which they should not be entitled under the UK double tax treaties. The Government will circulate draft legislation for comment in the fall with a view to passing legislation in 2012.

Continue Reading UK Government Announces 2011 Budget, Tax Changes

On December 9, the UK Government announced its intention to introduce a levy on UK banks and the UK branches and subsidiaries of foreign banks. The bank levy will be implemented for all accounting periods ending on or after January 1, and will be charged at an annual rate of 0.05% for 2011 and 0.075%

The newly-elected UK Government announced its first Budget on June 22. Key provisions include:

  1. Capital Gains Tax is increased to a top rate of 28%, from a flat rate of 18%, with effect from midnight on June 22.
  2. The introduction of a UK levy on banks (including the UK branches and subsidiaries of foreign banks).

The UK tax authority, Her Majesty’s Revenue and Customs (HMRC) has issued its new Offshore Funds Practice Manual. This sets out official guidance as to which funds will be treated as “offshore funds” for UK tax purposes and details of HMRC’s approach as to how offshore funds will be treated. The redemption or sale of