ARTICLE · 02 JANUARY 2013

Finance Bill 2013 - Draft Clauses: Reform Of Two Key Offshore Anti-Avoidance Provisions

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The UK tax system contains two key pieces of anti-avoidance legislation designed to prevent assets being transferred or held overseas to avoid UK tax.

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Smith & Williamson

Background

The UK tax system contains two key pieces of anti-avoidance legislation designed to prevent assets being transferred or held overseas to avoid UK tax.

The first of these relates to chargeable gains and aims to prevent UK resident individuals keeping assets outside the scope of capital gains tax by holding them through a closely controlled company resident abroad.

The second provision is often known as the 'transfer of assets abroad' legislation. This aims to prevent UK ordinarily resident individuals (UK resident individuals from 6 April 2013) avoiding income tax through a transfer of assets so that income becomes that of an offshore person while the UK individual continues to be able to enjoy the income or to receive entitlement to capital or other benefits as a result of the transfer.

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