These provisions are a key part of anti-avoidance legislation in the UK regarding non-UK structures. Any change could have a profound impact on how individuals operate their non-UK businesses and hold their non-UK investments.
Individuals and family offices will wish to keep close to future developments and KPMG will be closely monitoring the position. In the meantime, in the light of these announcements, tax payers should review their existing structures and consider any steps which should be taken. Those contemplating new investment structures should also pause for thought before proceeding – is the best vehicle now an offshore company or perhaps a UK one? Should existing structures be moved to an EU vehicle?
The nature (if any) of the steps client might wish to take will depend on the existing position. However, areas to consider include the following:
- Taxpayers currently paying tax on income under the transfer of assets abroad rules, where the relevant transfer was to a person tax resident in the EU, may wish to consider making a claim to exempt such income (on the grounds that the rules appear contrary to EU law and so should not apply);
- Similarly, taxpayers who are suffering an attribution of gains realised by non-UK resident companies may wish to consider making a claim based on EU law.
Advice should be sought from an EU tax specialist before any such claims are made.
It is clear that the period of uncertainty continues. One thing above all does seem clear however. The offshore landscape as we know it is set to change forever. All taxpayers need to reflect now on how to position themselves for change.
For more information, please speak to your usual KPMG Tax & Pensions contact.