UK Finance Bill published

Nov 12, 2018

Last week, Finance (No. 3) Bill 2017-19 was published together with Explanatory Notes. There were also a number of consultations and consultation outcomes published alongside the bill, including a consultation on the proposed digital services tax.

This Bill will become Finance Act 2019 once it completes its journey through parliament and is expected to receive Royal Assent before the new tax year commences on 6 April 2019.  The Bill is largely as expected following the Autumn Budget but there are areas where the legislation and supporting documentation published provide significant further detail and clarification. Second reading of the Bill is scheduled for 12 November.

The Bill, as introduced, includes two new capital gains tax related measures for corporation tax which appear to look ahead to Brexit and the potential for Brexit related CGT exposures on exit charges. 

  1. From 1 January 2020, chargeable assets that come within the UK charge to corporation tax as a result of a non-resident company becoming UK resident (or beginning to use the asset in a UK permanent establishment (PE)) will be able to rebase the asset to its deemed market value where an exit charge is suffered in another EU jurisdiction; and
  2. From 6 April 2019, companies resident in another EEA member state that suffer an exit charge on deemed disposals because the assets ceased to be used in a UK PE will be able to enter into an exit charge payment plan which will allow the tax due to be paid in six equal annual instalments.

According to the accompanying Explanatory Notes, 1. above is to ensure compliance with EU law and 2. adapts existing rules to implement the EU Anti-Tax Avoidance Directive.

Draft legislation has also been published setting out that the payment window for stamp duty land tax (“SDLT”) and filing of SDLT returns is being reduced from 30 days to 14 which will take effect from 1 March 2019.