Key Facts

• Clauses 72 and 73 address inheritance tax treatment of trust additions.
• A Court of Appeal decision created uncertainty about domicile status of settlors for later asset additions.
• Draft legislation was published in July 2019, allowing feedback from stakeholders including the Chartered Institute of Taxation and PricewaterhouseCoopers.
• HMRC figures show a 13% reduction in UK-based individuals with non-domiciled tax status.
• The Chartered Institute of Taxation expresses concern over scenarios where property could inadvertently be brought into inheritance tax scope due to changes in trust status.
• Clause 72 is not intended as an anti-avoidance measure but changes long-standing rules, leading to concerns about retrospection and lack of consultation.
• Clause 75 extends the market value rule introduced in Finance Act 2019.
• The changes prevent artificial reduction of stamp tax on share acquisitions involving unlisted shares transferred to connected companies.
• Expected revenue from the measure: £25 million over the scorecard period.
• HMRC’s impact assessment notes a negligible impact on 250 to 350 businesses in the first year.
• The measures were subject to consultation during which respondents expressed satisfaction with the targeting of the rules.
• Clause 77 prevents double stamp duty charges from arising on most capital reduction partition demergers by better targeting existing anti-avoidance provisions.
• Clause 78 simplifies VAT accounting for cross-border transactions.
• New clause 13 aims to assess the impact of Clause 78 on sectors such as leisure, retail, hospitality, and others within six months post-Royal Assent.
• Fewer than 200 UK businesses are known to be using the new call-off stock rules.
• The EU directive provides simplified VAT treatment of call-off stock.
• 200 companies have already taken up the optional rule.
• Concerns are raised about the lack of a transition period and confusion for businesses.
• The amendment would require a review and report by the Chancellor of the Exchequer.
• Off-duty alcohol sales in Scotland fell by 3.6% after minimum unit pricing was introduced.
• In England and Wales, off-duty sales increased by 3.2% during the same period.
• The clause amends the Alcoholic Liquor Duties Act 1979.
• Global Brands faces making 50% of its workforce redundant due to financial burdens placed by the clause, putting 200 jobs at risk.
• The Government plans a wider review of alcohol taxation.
• Post duty point dilution allows certain producers to reduce excise duty by increasing product volume without paying additional duty.
• Clause 79 sanctions will take effect from April 2020, providing businesses almost three years to prepare for the change.
• HMRC conducted a review of post-duty point dilution practices in 2017 and published draft legislation in July 2019.
• The amendment would require a review by the Chancellor on the impact of tobacco duty changes within one year.
• The UK Centre for Tobacco and Alcohol Studies recommended updating the minimum excise tax annually.
• The all-party parliamentary group on smoking and health, ASH, and others propose a road map to a smoke-free 2030 including a hypothecated levy from tobacco manufacturers.
• Smoking rates in the UK are around 14% of adults.
• The clause increases tobacco duty on all products by RPI inflation plus 2%, with an additional 4%-6% increase for hand-rolling tobacco this year.
• New penalties for tobacco tax evasion include a £10,000 fixed penalty and a sliding scale for repeat offenders.
• Vehicle excise duty rates will be uprated by RPI for the tenth successive year without changing in real terms since 2010.
• The standard rate for cars will increase by only £5, flat rate for vans by £5, and motorcyclists' rate by no more than £2.
• CO2 emissions figures for vehicle excise duty will be based on the world harmonized light-duty vehicles test procedure (WLTP) from April 1, 2020.
• The NEDC test underestimates real-world driving emissions by up to 40%.
• Draft legislation was published in October 2019 for the Finance Bill to switch on WLTP from April 2020.
• All zero-emission light passenger vehicles registered between April 1, 2017, and March 31, 2025, are exempt from the vehicle excise duty supplement.
• The exemption will reduce vehicle excise duty liability for almost a third of zero-emission cars by an estimated £1,625.
• A £500 million investment over five years was announced to support the roll-out of a fast charging network for electric vehicles.
• Most new motorhomes pay a flat rate of £270 annually for VED since March 12, 2020.
• From April 1, 2021, motorhome VED liabilities will be aligned with vans based on environmental impact.
• The National Caravan Council expressed concern about the changes in VED liability.
• New motorhomes’ first-year VED liabilities have been reduced by up to £1,905.
• Amendment 12 would insert “, including human breastmilk” after “supplies” in clause 85.
• The purpose-built vehicles used by medical courier charities transport a range of medical products, including human breast milk.
• Clause 85 already covers the transportation of human breast milk.
• The amendment was negatived.