Trust complaints are ‘misconceived’

Trust complaints are 'misconceived'

Government sources say that some of the row had been a ‘hoo-ha’

The profession and the taxman are due for new clashes on the trust clampdown,
as government sources told Accountancy Age that some of the row had
been a ‘hoo-ha’ and that many of the complaints about the move were
‘misconceived’.

A senior HM Revenue & Customs official refused to repudiate Treasury
suggestions aired in The Times that the row had been got up by
‘publicity-hungry accountants and opportunistic Tories’.

‘The period between Budget day and the publication of the finance bill always
leads to a fair amount of speculation. A lot of that on this measure has been
shown to be misconceived,’ the source said.

HMRC believes that the finance bill has ‘taken the heat out of the
situation’, yet advisers continue to raise issues. Institutes, which last week
in an unprecedented alliance issued a release calling for delay, are now working
on their own figures analysing the impact of the move.

HMRC sources said that £15m was a ‘good conservative estimate of the likely
yield’, but added that the measure was aimed at ‘the use of these trusts for
aggressive tax planning by seriously wealthy people’.

If the tax planning concerned was really aggressive, however, many will
question why it is not worth more to government.

HMRC director-general Dave Hartnett said on BBC’s Moneybox that HMRC
was in ‘listening mode’ on the issue, a suggestion our source sought to clarify.
‘I don’t think anyone should regard this legislation as in any sense fluid or
anything like that,’ the source said.

No new HMRC problems have been brought to Hartnett’s attention since, it is
understood.

Responding to different scenarios of those affected, an HMRC official said:
‘These are interesting questions. Whoever is raising them really ought to read
the finance bill quite carefully.’

HMRC figures reject the argument that it should have consulted, saying the
announcement puts a ‘stake in the ground’.

‘There is time for people to make alternative arrangements in an orderly and
transparent way,’ they said.

Life policies will not be affected, they added: ‘For new policies it is
almost impossible to say what the valuations might be (at the time the tax is
charged).’

‘This is no big deal. The life insurance industry is saying the finance bill
as published has very significantly removed its concerns.’

Related Articles

Supreme Court rules against Pimlico Plumbers in landmark employment case

Legal Supreme Court rules against Pimlico Plumbers in landmark employment case

1w Alia Shoaib, Reporter
Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

2m Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

3m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

5m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

6m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

7m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

8m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer