Finance Bill 2013 draft clauses published « Copia Wealth & Tax

Finance Bill 2013 draft clauses published

The main tax announcements for the 2013-14 tax year, as announced 5 December 2012, have now been published as draft clauses for the forthcoming Finance Bill 2013.

GAAR

The new acronym stands for General Anti-Abuse Rule. It will give HMRC powers to stop companies and tax payers taking advantage of complex tax arrangements in order to save tax.  The new powers will affect all tax arrangements entered into from the date the Finance Bill 2013 receives Royal Assent.

Statutory residence test

A new statutory residence test will come into force from 6 April 2013. For the first time this will place the determination of an individual’s tax residence on a statutory basis. The legislation will also provide for a tax year to be split into a UK part and an overseas part in certain circumstances and new rules for the taxation of particular income and gains arising during a period of temporary non-residence.

Higher rate threshold

As announced in the Autumn Statement 2012, the higher rate threshold for Income Tax will be increased by 1%: for 2014-15 to £41,865 and for 2015-16 to £42,285. This threshold is the amount at which an individual pays tax at the higher rate, presently 40%.

Capital Gains Tax annual exemption

As for the higher rate threshold the Capital Gains Tax annual exemption is also being raised by 1%: for 2014-15 to £11,000 and for 2015-16 to £11,100. This threshold determines the maximum gains that an individual can accrue in each tax year without paying Capital Gains Tax.

Fuel duty

Secondary legislation will be introduced to confirm the cancellation of the fuel duty rate increase due to have been made January 2013.

Employer supported childcare

Secondary legislation is also being introduced to increase the tax exempt amount for employer supported childcare. This includes childcare vouchers or directly contracted childcare. The tax exempt amount will be increased from £22 to £25 per week for additional rate tax payers who joined such a scheme on or after 5 April 2011. This will ensure that the value of tax relief available for employer supported childcare continues to be aligned to the value received by basic rate tax payers.