London-based Tax & Private Clients partner Daniel Lewin was featured in Reuters Practical Law’s “2016 Budget: A Rip-roaring Roller Coaster Ride?” which provided an overview of leading UK tax practitioners’ insights regarding the UK’s 2016 Budget.
Seventy-nine attorneys in total were interviewed for their commentary on the 2016 Budget, with a consensus that it was relatively balanced. Topics included: restriction on the availability of relief for employee shareholder shares, a double tax treaty scheme to ensure the needs of UK borrowers and foreign investors was welcomed, withholding tax obligations on payments of royalties, proposals to reform the tax treatment of corporation tax losses, change to entrepreneurs’ assistance and the reduction in the rate of capital gains tax, stamp duty land tax, and implementation of the OECD’s base erosion and profit shifting recommendations.
While the change to entrepreneurs’ assistance and the reduction in the rate of capital gains tax were broadly welcomed, Lewin expressed concern about the differential between the rates of tax on income and capital, stating that “It is an odd Budget—handing out candy with one hand, while taking it back elsewhere. The surprise reduction in capital gains rates is clearly a positive step and should help spur investment. However, the top income tax rates remain too high, and while HMRC have shut down most of the accepted tax planning routes, the new 27 percent differential between the highest income tax and capital gains tax rates means that the search for new ways of achieving capital gains treatment will increase.”
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