Election 2017 - considerations for businesses and individuals
What are the possible actions businesses and individuals can consider based on the manifestos?
Taxpayers may wish to consider whether there is any action they should take before the election or before the new government’s first Budget.
However, it is difficult to forecast what tax policies will be in place in the next few months given the moving polls and uncertainty over who will be in power. Tax changes introduced by a new government could also be backdated to April 2017, may come in part way through the tax year or indeed at a later date. Action before the election could therefore still be caught by a subsequent change.
While actions should be driven by commercial and other non-tax factors, deferring or accelerating decisions so as to take action in advance of potential changes to the tax legislation may be worth considering, subject to the above. Of course, backdated forestalling provisions may make steps ineffective.
If you are considering taking any key decisions, you may as ever wish to discuss these with your tax adviser.
Provisions left out of Finance Act 2017 – we expect, although we cannot be certain, that the significant provisions dropped from what is now Finance Act 2017 will become law under a further Finance Act later this year. Many of the provisions were expected to be effective from 1 or 6 April 2017 but it is now not clear which date these provisions will take effect from. Retrospective legislation could mean a start date in April 2017. Another option would be a start date of 6 April 2018 with transitional rules for taxpayers who had taken action relying on these changes already being in place. Anyone considering taking decisions in these areas in the meantime should be aware of the uncertainty and carefully consider the implications of any possible outcome. Deferral may be worth considering. Measures affected include:
- making tax digital – though a Tory government is expected to reintroduce this after the election
- business losses and corporate interest restriction
- non-dom changes and inheritance tax on overseas property representing UK residential property
Some specific points to consider, particularly around the timings of transactions, are set out below.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.