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IoD: UK Budget Should Support Industry

Monday, July 6, 2015

The Institute of Directors (IoD) has called on Chancellor George Osborne to radically simplify the UK tax system when he delivers his Summer Budget on Wednesday.

The IoD said the Chancellor should be ambitious in his tax reform agenda and create an "equity economy," under which taxes on wealth would be "simple and sensible" and investment tax breaks would be easier to understand, to encourage more people to buy shares in entrepreneurial businesses.

The IoD would like Osborne to increase the Annual Investment Allowance from GBP500,000 to GBP600,000 and fix the cap for five years. It is seeking the better alignment of tax reliefs for venture capital trusts and Enterprise Investment and Seed Enterprise Investment Schemes. Small businesses should be given the option of being taxed like an individual or a partnership, and any reforms to the business rates system should not adversely affect microbusinesses, it said.

In addition, the IoD recommended that Osborne consult industry on the possibility of merging the UK's two direct taxes on capital – inheritance tax (IHT) and capital gains tax (CGT). It recommended that, in the meantime, Osborne should merge CGT rates at 20 percent, increase the annual exemption, and raise the IHT threshold to GBP1m. A triple-lock for income tax should be introduced, similar to that for the state pension, so that rate thresholds rise each year in line with consumer prices, wage growth, or by 2.5 percent, whichever is highest.

The IoD said that 90 percent of its members support action to crack down on aggressive tax avoidance. However, they are keen to ensure that legitimate tax planning is not penalized. According to the IoD, the Chancellor should make sure that the Organisation for Economic Cooperation and Development's base erosion and profit shifting proposals are implemented in a way that does not erode the UK's competitiveness. Osborne should also reject "ill-thought out and dangerous" proposals for a European-wide common consolidated corporate tax base.

Stephen Herring, Head of Taxation at the Institute of Directors, said: "As the economy continues to recover, both business and individual taxpayers will rightly expect more wide ranging tax reforms and simplification than the previous Government was able or willing to undertake. Businesses, especially SMEs, are concerned about high taxes on employment, commercial property occupation and transactions as well as being convinced that government ought to try much harder to deliver authentic, far reaching tax simplification."

"Individual taxpayers are rightly concerned with the impact of fiscal drag upon their marginal tax rates. The Chancellor should also take the opportunity to make it clear the Government is determined to distinguish between authentic tax planning by businesses and individuals and aggressive tax avoidance."

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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