Offshore Companies and Trusts - What Groundrules Now

Article Abstract:

Proposed anti-avoidance tax legislation is expected to end tax-saving investment in offshore companies and trusts from the United Kingdom. Legislation to prevent avoidance by individuals through transfers of assets overseas was first introduced in 1936. The legislation refers to avoidance by an individual (not company) of income tax (not capital gains). There must be a transfer of assets or a combination of transfers of assets and associated activities. Several cases and decisions clarify points in the law. Other acts discussed cover liability of non-transferors, tax liability of shareholders from capital gains realized by a non-resident company and liability for capital gains from non-resident trusts. Despite all these legislative acts, it is still effective tax planning to invest in off-shore companies. There has been a dispute concerning definition of non-resident companies. Is it where central management is and the directors meet or where the day-by-day management occurs? Another provision involves companies where United Kingdom residents have control in a privileged tax regime. Exceptions are described. New rules on funds are listed. It still appears, even in light of all these proposals expected to be passed in April 1984, that it will be wise tax planning to use offshore companies.

United Kingdom, Tax Planning

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The taxation of LIFFE contracts

Article Abstract:

The three ways in which the Inland Revenue may choose to tax financial futures are discussed: as trading income (Schedule D income, case I), as other income (Schedule D income, case VI), and as capital gains, under the Finance Acts of 1985 and 1984. The taxation of financial futures is discussed historically, beginning with the 1982 opening of the London International Financial Futures Exchange. The tax reforms in this area demonstrate the British government's desire to encourage international trading in financial futures on the London markets.

Security and commodity exchanges, Management, Securities, Financial futures, Securities taxes, London International Financial Futures Exchange, Great Britain

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The employee benefit trust comes of age

Article Abstract:

Employee Benefits Trusts (EBT) are being used in employee share ownership plans (ESOPs) to provide important opportunities for shareholders in private or public companies. EBTs are often used to form the foundation of cash bonus plans or to promote larger share ownership. Uses of EBTs and ESOPs are discussed, as well as obstacles that may be encountered with ESOPs. The Inland Revenue is currently examining the role of EBTs and ESOPS and is still debating whether to introduce new provisions in the future.

Analysis, Laws, regulations and rules, Employee ownership, Employee benefits, United Kingdom. Board of Inland Revenue

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