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HM Treasury has set out the proposed scope of a cap on relief for a range of of income taxes, as announced in the Budget early this year.
In a new consultation document, the department confirms the government’s May announcement that tax relief for charitable donations by way of gift aid, gifts of land and shares, payroll giving and the community investment tax relief, are excluded from the cap.
The condoc also invites comments on implementation and delivery, including how an individual’s income will be defined and calculated for the purposes of the cap, when it will apply, how reliefs will be ordered, and the operation of the cap through income tax self assessment.
The reliefs that will be affected are:
- trade loss relief against general income;
- early trade losses relief;
- post-cessation trade relief;
- property loss relief against general income;
- post-cessation property relief;
- employment loss relief;
- former employees deduction for liabilities;
- share loss relief;
- losses on deeply discounted securities; and
- qualifying loan interest.
The current plan is to cap the reliefs at £50,000 or 25% of income, whichever is the greater.
Comments should be sent no later than 5 October.
