Transitional relief on investment growth: withdrawal date changed (Spotlight 31)
Updated 31 August 2016
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Change of date for withdrawal of transitional relief on investment growth
The government intends to extend the date for withdrawal of transitional relief on investment growth currently available under paragraph 59 of Schedule 2 to Finance Act 2011 (Para 59) from 30 November 2016 to 31 March 2017.
The withdrawal of the relief was announced at Budget on 16 March 2016, as part of the package of changes to tackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans).
It also aims to make sure that those who have used these schemes pay their fair share of tax and National Insurance contributions.
More information can be found in the Technical note.
The transitional relief was intended to work alongside the EBT settlement opportunity, which closed on 31 March 2015.
Customers, their advisers and promoters should be aware that HM Revenue and Customs (HMRC) believe that disguised remuneration schemes don’t work, and will challenge these strongly.
The government wants to ensure all users of disguised remuneration schemes have the opportunity to settle with HMRC before the transitional relief in Para 59 is withdrawn.
Therefore an amendment to Finance Bill 2016 will extend the date for the withdrawal to 31 March 2017.
The amendment will mean that users who want to benefit from the transitional relief on investment growth in Para 59 must have settled on or before 31 March 2017.
If you or your clients have used or are using a disguised remuneration scheme you should seriously consider settling your tax affairs and talk to HMRC about how to do this. If you are already speaking to someone at HMRC about your use of a disguised remuneration scheme you should contact them in the first instance. If you don’t have a contact yet, you should email: ca.admin@hmrc.gov.uk.
Related guidance
Disguised remuneration: transitional relief on investment growth
Register to settle with HMRC by 31 October 2016 if you want to get transitional relief on your investment growth.
Employee Benefit Trust settlements after 31 July 2015
The general principles that HMRC will apply to settlements following the withdrawal of the Employee Benefit Trust Settlement Opportunity.