Statutory reorganisations: general power
This tax information and impact note is about the creation of a general power to neutralise any tax consequences of a reorganisation of public sector bodies.
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Tax rules that support commercial restructurings often cannot be applied to public body reorganisations because different rules apply to these organisations.
Before this measure, where a public body reorganisation gave rise to unintended tax consequences, bespoke legislation was typically required. This generally meant including tax provisions in primary legislation before the full tax implications of the reorganisation were known.
Where the tax consequences could not be identified with certainty at that stage, primary legislation would also need to include a specific enabling power allowing detailed tax provisions to be made later through secondary legislation.
This measure streamlines the process by enabling appropriate tax provisions to be made without first requiring a bespoke statutory power in primary legislation for many public body reorganisations, while retaining ministerial oversight through the secondary legislation process.