Tax experts have applauded the government’s grown up approach towards creating a more stable tax system.
By publishing a draft of the finance bill three months in advance of the changes, the Treasury has given experts and umbrella companies time to scrutinise the new legislation and make preparations for the new regulations.
Next year’s finance bill includes reforms to both the pensions framework and the corporate taxation system as well as a raft of complex measures to clamp down on tax avoidance.
As from next year, the individual annual pensions tax relief allowance will be reduced to £255,000 and the lifetime allowance will be set at £1.5 million as from 2012. The requirement to secure a pensions annuity by the age of 75 is also to be repealed but details of this move will not be released until February.
The government also intends to simplify the rules on corporate capital gains and lay down a clearer purpose-based rule to replace the existing tax avoidance rules.
People who let a furnished holiday property should be aware of new regulations that will affect them as from April 2012. Furnished holiday lettings will need to be available for 210 days per year instead of the current 140 days. And the property must be let for at least half of that time, i.e. 105 days as opposed to the current 70 day requirement. However, there will be a two-year grace period for property owners to comply with the 105 day rule.
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Image: Look right by Charles Collier
