UK and International Tax news

2017 Finance Act Receives Royal Assent

Monday 8th May 2017

The 2017 Finance Bill received Royal Assent on Thursday 27 April 2017 after having been trimmed from 135 sections and 29 schedules in nearly 800 pages, to 63 sections, 11 schedules and 155 pages, as a result of the general election called for 8 June 2017.

Proposals dropped from the Bill that was enacted include the following:

  • new rules on corporate loss relief and corporate interest restrictions,
  • changes to the substantial shareholding exemption,
  • amendments to anti-hybrid rules,
  • cost-sharing rules for the patent box regime,
  • new ‘non-dom’ rules,
  • restriction in the money purchase annual allowance to £4,000 per annum, from £10,000,
  • reduction in the dividend allowance from next April to £2,000 per annum, from £5,000,
  • technical changes to certain aspects of tax-advantaged venture capital schemes,
  • amendments to social investment tax relief,
  • extension of business investment relief,
  • changes to termination payments,
  • avoidance rules in relation to appropriations to trading stock,
  • provisions in respect of ‘making tax digital’
  • the new ‘requirement to correct’ in respect of undisclosed offshore tax non-compliance, and
  • penalties for enablers of defeated tax avoidance schemes.

It is expected that most, if not all, of the provisions dropped from the current Bill will return in a Bill after the election, regardless of who wins the election. The Financial Secretary to the Treasury has stated that there had been no policy change in respect of any of the clauses that had been cut from the Bill and that those clauses made a significant contribution to public finances. She said that the government would legislate for the remaining provisions at the first opportunity, assuming it is re-elected.

The Queen’s Speech will take place on 19 June, after the new Parliament is formed, which will leave a rather short time for any new Bill to be debated before the summer recess on 21 July. If the new government were to follow a timetable similar to that for the 2016 Finance Act, which started its committee stages on 27 June 2016 after the Brexit vote, royal assent might occur in September.

Contact Us