The Chancellor announced a new penalty of 60% of the tax due to be charged in all cases successfully tackled by the General Anti-Abuse Rule. He also introduced new measures to ‘name and shame’ persistent offenders, who have a series of avoidance schemes defeated by HMRC. These include special reporting requirements and a surcharge on those whose latest return is inaccurate due to use of a defeated scheme.
The Government also sought to close a number of technical loopholes: For example, rules will be introduced to prevent the avoidance of stamp tax where ‘deep in the money’ options are used to transfer shares to a depositary receipt issuer or clearance service. The Government will also publish a consultation on the rules on company distributions, largely to prevent income being converted to capital to secure a lower tax rate. It will also look at abuses of the intangible fixed assets regime.
Having already tackled some of the tax advantages around buy-to-let properties, the Chancellor went one step further in the Autumn statement, increasing Stamp Duty Land Tax by 3% for all second homes and buy-to-let properties from 1 April 2016.
Paul Smee, director general of the Council of Mortgage Lenders, said the Chancellor needed to be wary about market distortions: “Additional stamp duty on buy-to-let transactions comes hot on the heels of the forthcoming tax changes to landlords already announced. Government will need to keep a careful eye on the cumulative effects; with the private rented sector housing around a fifth of the population, we do need to avoid unintended consequences.” The Government also announced 400,000 new affordable homes.
There were relatively few changes in the Isa regime, which disappointed some. Isa allowances were frozen, though the Government did announce some expansion of eligible investments – from Autumn 2016, the list of eligible investments in the new Innovative Finance ISA will include debt securities offered via crowdfunding platforms.
