Seminar update on economic substance rules and trust tax
A seminar aimed to keep clients and members of the business community up to date on a constantly evolving tax environment.
The KPMG event took place at the Claremont Hotel in Douglas.
Tax partner, David Parsons, started proceedings with an update on the economic substance rules that are now in force in the Isle of Man and many other jurisdictions across the globe.
Justine Howard, senior tax manager, considered changes to the taxation of trusts that came into force in April 2017 and 2018 and highlighted steps that could be taken by trustees, settlors and beneficiaries of Isle of Man trusts to ensure UK tax liabilities are not overlooked under what is now extremely complex legislation.
Edward Renton, a senior tax manager in the private client tax investigation team in KPMG London, looked at how HMRC can collect data though their multi-million pound database system, called "Connect", and how they use this data to discover discrepancies and under-reporting of tax liabilities. He then alerted the audience to the increased offshore penalties that can now be levied under the UK’s "Failure to Correct" regime and where assets are moved offshore to avoid a UK tax charge.
Given the imminent reporting deadline for the Common Reporting Standard (CRS) and the Tax Office’s CRS compliance review programme, Clare Kelly, senior tax manager, highlighted some common issues she had identified recently in relation to companies’ CRS programmes.
She then continued by reminding everyone of the expansion of the scope of UK corporation tax to ’non-resident landlords’ before recommending that any entities affected by the rules undertook an impact assessment at an early stage.
Paul Cawley, head of indirect Tax, focused on the timetable for the next steps in the UK’s parliamentary process as regards Brexit, before considering the implications of HMRC’s new ’Making Tax Digital’ requirements for UK VAT registered businesses.
The final subject was the taxation of the digital economy. David Parsons provided an overview of the OECD’s latest initiative in this area, which arises from a recognition that the current global tax framework simply does not work for such businesses.
The seminar provided a useful update on a variety of topics and reminded us that tax is not getting any easier. In addition, the need for tax professionals to assist in understanding and interpreting complex legislation and to provide early tax advice before doing anything is even more evident.
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