Other news in brief | KPMG | UK

Other news in brief

Other news in brief

A round up of other news this week.

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The Office of Tax Simplification (OTS) has published a progress report on its review into Stamp Duty on paper transactions. It has also issued a call for evidence on the next stages of the review.  

The Exchange of Notes to amend the UK-Canada Convention for the Avoidance of Double Taxation has been presented to Parliament.

The Court of Appeal has dismissed the taxpayers’ appeal in the case of Samarkand Film Partnership No 3 & others v HMRC [2017] EWCA Civ 77. The Court agreed with the Upper Tribunal that the film partnerships were not trading and accordingly the partners were not entitled to loss relief to set against their taxable income. In addition the Court upheld the decision of the Upper Tribunal to dismiss the taxpayers’ application for judicial review; HMRC’s Business Income Manual did not, the Court agreed, give rise to a legitimate expectation in circumstances where HMRC had reasonable grounds to suspect tax avoidance. The judgment in this case comes at a time when Andrew Tyrie, Chairman of the Treasury Committee, has written to Chancellor Philip Hammond about HMRC’s response to the exploitation of tax breaks for the film industry, highlighting the financial distress that some investors face.

The CJEU has issued a judgment in a case concerning an individual taxpayer whose total income was split between two jurisdictions, neither of which was his country of residence. At issue was whether one of the jurisdictions was to take the ‘negative income’ arising from his dwelling in his EU Member State of residence into account and, if so, how much. The CJEU found that the negative income was to be taken into account on a pro rata basis, provided that the taxpayer’s EU Member State of residence is not in a position to grant him an advantage.

The Patent Box section of HMRC’s Corporate Intangibles Research and Development Manual has been updated to include guidance on the new OECD compliant regime as well as other amendments required to reflect changes brought in by the FA2016 legislation. 

The Offshore Funds (Tax) (Amendment) Regulations 2017 change the way UK investors in offshore reporting funds are taxed. From April 2017 performance fees will be set against any gain on disposal rather than deducted from income each year.  Only one minor amendment has been made since the regulations were published in draft in December.

The Tax Matters Digest consultation tracker for March can be found here

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