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The Treasury published the draft legislation for consultation and subsequent inclusion in the 2012 Finance Bill on 6 December. Comments should be submitted by 10 February 2012. The corporation tax measures are summarised below and in the related articles (see links above).
CT rates
As announced in Budget 2011, legislation will be introduced:
- to reduce the main rate of corporation tax to 24% for the financial year beginning 1 April 2013; and
- to keep the small profits rate of corporation tax at 20% from the financial year starting 1 April 2012.
DLT
Two changes are to be made to the disclosure of tax avoidance schemes regime for stamp duty land tax (SDLT).
The Treasury has seen an increase in the use of old avoidance techniques, and schemes are now being marketed for relatively low-value transactions.
The SDLT Descriptions Regulations will be amended to remove:
- the grandfathering rule for SDLT avoidance schemes that incorporate the use of the sub-sale rules (FA 2003, s 45); and
- the valuation thresholds.
Finance Bill 2012 will include a new power for regulations to provide for FA 2004, s 308 to apply with modifications. In essence these will require the promoter to make one further disclosure of such a scheme so that new users can be identified.
Mike Dalton, tax director at Grant Thornton said, ‘This clampdown on SDLT planning is all about HMRC gaining more information about usage of avoidance schemes. This will assist in challenging schemes that HMRC believe do not currently work.’
Lloyd’s stop loss
Following an informal consultation, legislation will be introduced to ensure that all premiums payable by corporate members of Lloyd’s in respect of member-level stop-loss reinsurance taken out on or after 6 December 2011 will be deducted for tax purposes at the same time as the recognition of the profits to which they relate.
