I am in the process of preparing a submission to the Treasury Committee, basically taking issue with the following:
http://www.parliament.the-stationery.../430/43002.htm
99. Treasury officials told us that:
Following the introduction of the disclosure rules in 2004, it was disclosed that a number of individuals, particularly in the property industry, had been taking a different interpretation from that which had been announced in 1987 and were continuing, without any active presence in the Isle of Man and only having income in the UK, to be claiming that 99% of their income was effectively covered by the Isle of Man double tax treaty. The action that has been announced here is retrospective. It confirms what was set out quite clearly in 1987 and what was intended by the Isle of Man treaty when it was entered into.
This is not correct. I have been under enquiry since November 2003, and I know others who have been under the cosh since June 2003. The Treasury/HMRC are making it appear that the alleged dta abuse has only recently come to light, whereas they have been investigating it for at least 5 years!!!
The Treasury Committee have requested the following response from Government, and I for one am not relying on them to come clean.
We welcome steps taken by the Government to prevent tax avoidance through the misuse of double taxation treaties by UK residents. We are concerned by the suggestion that the Government has known about this abuse for some time and yet has failed to act. We recommend that the Government set out, in its response to this Report, when it was first alerted to the abuse, why action was not taken earlier and why it considers a 21-year period of retrospection appropriate. We expect the Government to move swiftly to close future abuses of the tax system that are disclosed to them.
Thankfully, we are not alone in opposing the use of retrospective measures:
http://www.parliament.the-stationery...30/430we03.htm
RETROSPECTION
It is one of the general principles of UK tax law that tax changes are not made with retrospective effect. That said, the Paymaster General's statement that accompanied the December 2004 Pre-Budget Report gave warning of possible retrospective action against avoidance schemes—but only in a limited area and only back to 2004.
To find that a measure (BN 66) is being introduced which will have retrospective effect back to 1987 is unacceptable. It is not even on an area dealt with by the PMG's statement. The subject of the change may be an avoidance scheme, but that is not an excuse for such far-reaching action which is well beyond "clarification", as claimed by the note. This is a dangerous precedent for the integrity of the UK's tax system.
I will update this thread in due course.
If anyone else feels like contacting the Treasury Committee, their email address is [email protected]
http://www.parliament.the-stationery.../430/43002.htm
99. Treasury officials told us that:
Following the introduction of the disclosure rules in 2004, it was disclosed that a number of individuals, particularly in the property industry, had been taking a different interpretation from that which had been announced in 1987 and were continuing, without any active presence in the Isle of Man and only having income in the UK, to be claiming that 99% of their income was effectively covered by the Isle of Man double tax treaty. The action that has been announced here is retrospective. It confirms what was set out quite clearly in 1987 and what was intended by the Isle of Man treaty when it was entered into.
This is not correct. I have been under enquiry since November 2003, and I know others who have been under the cosh since June 2003. The Treasury/HMRC are making it appear that the alleged dta abuse has only recently come to light, whereas they have been investigating it for at least 5 years!!!
The Treasury Committee have requested the following response from Government, and I for one am not relying on them to come clean.
We welcome steps taken by the Government to prevent tax avoidance through the misuse of double taxation treaties by UK residents. We are concerned by the suggestion that the Government has known about this abuse for some time and yet has failed to act. We recommend that the Government set out, in its response to this Report, when it was first alerted to the abuse, why action was not taken earlier and why it considers a 21-year period of retrospection appropriate. We expect the Government to move swiftly to close future abuses of the tax system that are disclosed to them.
Thankfully, we are not alone in opposing the use of retrospective measures:
http://www.parliament.the-stationery...30/430we03.htm
RETROSPECTION
It is one of the general principles of UK tax law that tax changes are not made with retrospective effect. That said, the Paymaster General's statement that accompanied the December 2004 Pre-Budget Report gave warning of possible retrospective action against avoidance schemes—but only in a limited area and only back to 2004.
To find that a measure (BN 66) is being introduced which will have retrospective effect back to 1987 is unacceptable. It is not even on an area dealt with by the PMG's statement. The subject of the change may be an avoidance scheme, but that is not an excuse for such far-reaching action which is well beyond "clarification", as claimed by the note. This is a dangerous precedent for the integrity of the UK's tax system.
I will update this thread in due course.
If anyone else feels like contacting the Treasury Committee, their email address is [email protected]
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