UK: The Compatible Mr Brown?

Last Updated: 3 May 1999
The Compatible Mr Brown?

In this special Finance Bill Edition of Tax Insight we have selected issues which have caught the attention of advisers and commentators in the aftermath of last month's Budget Day press releases. One of these, the implications of the decision of the European Court in the case of ICI -v- Colmer, only obliquely relates to the Finance Bill in that one of the Budget press releases refers to further consultation taking place relating to the creation of cross-border groups for the purposes of the taxation of chargeable gains, and the Bill itself does not as yet contain the legislation that will be necessary to reconcile UK tax law to articles 52 and 58 of the E.C. Treaty. However, as the debate concerning the implications of Colmer continues to develop, whether through business meetings, the press, the publicity material of tax accountants published through hand-outs or through contacts in the press, we have sought to take stock of the current situation.

The Finance Bill is prefaced with a statement by the Chancellor that fulfils his statutory obligation under the Human Rights Act 1998 regarding compatibility with the European Convention on Human Rights. Although the statement has become a necessary act of routine by the relevant minister of the Crown, there is an interesting issue as to whether, in refusing to remove the requirement that stamp duty must be paid before an appeal is made against a stamp duty assessment, the Chancellor has failed to remove an aspect of UK tax law that is in conflict with the Convention based right to free access to the courts. This is explored further in Fiona Sutherland's article.

Another aspect of the Bill that is interesting in the negative sense of being absent is the continued delay in the enactment of the proposed GAAR. Indeed, it would appear that for the time being at least, the GAAR is being shelved and instead further specific anti-avoidance rules are being introduced. A curious example of this is the new rule regarding the abuse of capital gains tax concessions, which is analysed in Adam Blakemore's article. Another example is the new regime governing the abuse of VAT grouping rules, which, as will be seen from Bev Tanner's article, provides a further instance of discretionary powers being taken by the executive. Finally, the loss of the Privy Council case of IRC -v- Wattie appears to have prompted a new regime for taxing reverse premiums which, it will be seen from Mark Simpson's article, may have a harmful effect on the property market.

We shall have to wait for next year's Finance Bill to see how one of the Budget's proposals designed to assist business - new share schemes for all employees - finally shapes up. As will be seen from Mark Simpson's article, the Budget proposals are as yet lacking in substance and much may emerge from the consultation process.

For further information please contact George Hardy, e-mail: Click Contact Link , 2 Park Lane, Leeds, LS3 IES, UK, Tel: + 44 113 284 7000

This article was first published in the Tax News - Special Finance Bill Edition issue of Hammond Suddards Tax News updates

The information and opinions contained in this article are provided by Hammond Suddards. They should not be applied to any particular set of facts without appropriate legal or other professional advice.

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