News Roundup Friday 12th April 2019

NEWS ROUNDUP

TAX NEWS

Treasury rejects loan charge delay

Ministers remain unmoved on HMRC’s loan charge despite MPs protesting its consequences in Parliament again yesterday. The retrospective charge applies to tax schemes dating back to the early 2000s under which self-employed people could receive their pay into an offshore trust and then loan the money back – thereby avoiding tax payments. Following a law change in 2015 around 50,000 people face large bills – one man reportedly committed suicide after receiving a £50,000 bill. But Mel Stride, the Treasury minister, said the tax office would not bankrupt anyone nor would anybody “lose their primary residence as a result” of the charge.

The Daily Telegraph, Page: 2

An inheritance tax trick for widowed spouses who remarry

Harry Brennan explains in the Telegraph how individuals who are no longer married can continue to take advantage of their partner’s IHT allowance after they die. The use of discretionary trusts has practically died out since the introduction of the transfer of allowances, says Brennan, but widowed spouses who remarry can enjoy almost the same amount of protection as direct descendants under current IHT rules if they utilise IHT-exempt discretionary trusts, enabling them to pass on £975,000 tax-free. Brennan adds that beneficiaries can use a deed of variation up to two years after death to make use of this tactic retrospectively.

The Daily Telegraph

TAX ALERTS

Here at KSK we periodically release Tax Alerts regarding the latest changes and proposals that may have an impact on individuals and businesses.  Here are links to the latest Tax Alerts issued:

Capital Gains Tax

Proposed changes to Capital Gains Tax and Personal Residences

Private residence relief consultation

Tax Alert CGT – personal residence

CAPITAL GAINS TAX FOR NON-UK RESIDENTS

Non-UK Resident owners of UK property need to be aware of new changes

Tax Alert CGT – Non-UK resident

CORPORATE NEWS

Green brings in restructuring specialists in preparation for Arcadia overhaul

Sir Philip Green has appointed two board members with extensive restructuring experience as he prepares to overhaul his fashion empire. Jamie Drummond Smith, a former Deloitte partner who is chairman of alternative credit provider Cattles, joins the board of holding company Taveta Investments as its interim chairman. Peter Bloxham, a former restructuring partner at Freshfields Bruckhaus Deringer, sits as an interim non-executive director. The two men will also sit on the boards of Arcadia and Topshop. Green is preparing to close stores and is seeking to halve annual payments to Arcadia’s pension pot to £25m, a move that was condemned yesterday by the parliamentary work and pensions committee. Arcadia’s pension fund has a deficit of about £530m on an actuarial basis.

The Times, Page: 51 Financial Times, Page: 18 The Daily Telegraph, Business, Page: 4 The Independent, Page: 62 The Guardian, Page: 37 Daily Mirror, Page: 46 Daily Mail, Page: 80

REPORTING NEWS

S&P climate risk assessment will turn up heat on auditors

The Mail’s Ruth Sunderland considers how the issue of climate change has become more important to investors citing a report by advisory firm Mercer this week which found that high levels of global warming would cause negative effects across swathes of the stock market. Sunderland notes that companies and their auditors will come under pressure to reveal their exposure to climate change as rating agency Standard and Poor’s this week launches a new service assessing environmental and social risks, alongside its credit rankings.

Daily Mail

PENSIONS NEWS

Auto-enrolment pensions can mean a smaller mortgage

The Telegraph’s Sam Barker reports on how last week’s rise in auto-enrolment pension contributions will leave some workers unable to borrow as much from mortgage lenders. Some lenders will subtract pension contributions from income before working out how much they will lend, a fact which Chris Sykes, of mortgage broker Private Finance, said would “likely to result in a number of prospective [buyers] finding their borrowing power reduced despite their earning capacity remaining constant”.

The Daily Telegraph

PERSONAL FINANCE NEWS

Scots see their savings fall by 60% over ten years

Household savings in Scotland have fallen by 60% since 2010, research figures reveal. In 2010 households had on average £3,840.41 in the bank, but by 2017 this was reduced to £1,517.31, analysis from Scottish Labour shows. James Kelly, Scottish Labour MSP for Glasgow and party finance spokesman, said the reduction in savings was “fuelled” by stagnant wages and debt.

The Scotsman, Page: 9 The Press and Journal, Page: 14

ECONOMY NEWS

Scottish cities among Britain’s top ranking “digital destinations”

A new report by property consultancy CBRE reveals that Edinburgh and Glasgow are among Britain’s top ranking “digital destinations”. The firm’s Tech Cities study ranks the top UK locations based on factors such as education, concentrations of existing tech firms and employment, cost of living, cost of office space and wage levels. Over the last two years, Glasgow has climbed three places to become the UK’s second-top tech destination outside London, just behind Manchester, while Edinburgh maintains third spot outside the UK capital. CBRE Scotland chairman Doug Smith commented: “The digital tech sector added £14bn to the UK economy in 2018, up 8% since 2016, and the sector is growing three times faster than the rest of the economy. The creative industries sector – which encompasses businesses from tech to media and telecoms – is therefore fundamental to the future success of Scotland.”

The Scotsman, Page: 35

Further Brexit delay will hinder growth

The head of the IMF, Christine Lagarde, has said that further uncertainty over Brexit will hinder growth in the UK economy. Speaking ahead of the agreement of an extension to Article 50, Ms Lagarde warned that any prolonged uncertainty would have a “negative impact”. Her comments were followed by a lukewarm welcome from business lobby groups in the UK, who said extended uncertainty meant companies would likely persist with curbing investments.

BBC News Financial Times, Page: 3

Contact Paul Southward.

Paul Southward