Tax changes: 2012 and beyond

On 6 December 2011 HMRC published draft clauses for the 2012 Finance Bill. This will set the scene for tax changes in 2012-13 and subsequent tax years. Notable items include:

  1. From 1 April 2013 companies will be able to apply a 10% tax rate on profits attributable to patents and other intellectual property.
  2. Research & Development tax credits are to be improved.
  3. The new statutory residence test is to be introduced from April 2013, a year later than expected.
  4. A new scheme to encourage investment in new, small start up companies will be launched from April 2012. The scheme will be a variant of the present EIS scheme and will be known as the Seed Enterprise Investment Scheme. Whilst reliefs may be greater, investment limits are more restricted.
  5. The present EIS and Venture Capital Trust legislation will be more restrictive in order to focus on higher risk activities.
  6. The UK tax position of certain non-domiciled individuals is changing from 6 April 2012. The good news is that non-doms will be able to bring in funds to invest in the UK without being penalised; the bad news is that for non-domiciles who have been resident in at least 12 of the previous 14 tax years, the present annual charge payable to secure more favourable tax breaks is to increase from £30,000 to £50,000 from April 2012.
  7. The UK Controlled Foreign Company (CFC) rules are to be relaxed in certain circumstances. Not all of the expected changes in this area have been published – the remainder are expected to be made public shortly.


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