Budget 1984 - The Unknown Factor
Article Abstract:
Proposals from the Law Society, Institute of Taxation, and the CCAB (an accounting association) to the government of the United Kingdom concerning the budget of 1984 are discussed. The present government has proven to rely on recommendations from these bodies in the past. One of the proposals is to provide relief for loans which are used to buy foreign properties as presently interest on such loans is not deductible. Income tax relief should be allowed for older taxpayers who are already drawing retirement annuities as these were severely restricted until 1980. Tenants should be allowed capital allowances. Proposals concerning property transfers between ex-spouses are inconsistent. The CCAB's recommendations centered around group relief, limiting the disallowance of losses on a change of ownership in a business to those whose motive is tax avoidance, relief for small companies who disincorporate and group relief for capital losses. The CCAB's position that the Inland Revenue needs to prove that transactions were carried out for tax avoidance in order to penalize a company will meet considerable opposition.
Publication Name: The Accountant
Subject: Business
ISSN: 0001-4710
Year: 1984
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Inland Revenue Unveil Proposals on Off-Shore Funds
Article Abstract:
The Inland Revenue of the United Kingdom has proposed legislation to be effective January 1, 1984 which would clamp down on tax avoidance by investment in offshore funds. The proposals include 1) shares disposed before January 1, 1984 will not be taxed, 2) shares disposed after will have a tax liability on the amount of gain realized after December 31, 1983 and will be exempt if the fund has genuinely distributed all its income, 3) insurance policies by non-resident life offices to United Kingdom residents will be non-qualifying with some exceptions, and 4) the profit realized when cashed in will be subject to tax. Offshore funds are not confined in definition to money funds. Distributing income clearance is discussed. Comments on the proposals are that they are stiff and, in some cases, unfair. Commodities are a risk investment and should be treated differently than money funds.
Publication Name: The Accountant
Subject: Business
ISSN: 0001-4710
Year: 1983
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CGT Changes and Proposals on Deep Discount Bonds
Article Abstract:
An amendment to the United Kingdoms's Capital Gains Tax Act 1979 was designed to stop schemes that avoided tax by establishing an artificial tax loss. Section 29a was enacted stating that a person's acquisition value of an asset shall not exceed the consideration given by him if there is no corresponding disposal by the transferor, or if the transferor is an 'excluded person'. The proposal on deep discount bonds treats the discount as income over the life of the security on a compound yield basis. The entire profit is counted in the year of redemption if it is held to redemption. But computation is complex if a bond is bought or sold. There is some relief for the borrower, but with anti-avoidance provisions.
Publication Name: The Accountant
Subject: Business
ISSN: 0001-4710
Year: 1984
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