Brown targets tax breaks
Sunday 29 June 1997
According to Whitehall sources, the Chancellor's plan is to close the main loopholes that currently allow companies and individuals to make unlimited capital gains offshore without being liable for tax in the UK.
However, the big target is thought to be multinational corporations, which successfully avoid paying capital gains tax on their assets by channelling them through "moneybox" companies registered in tax havens.
Under the current Controlled Foreign Companies legislation, companies with assets overseas but controlled from the UK must pay tax on the income generated by such assets. However, any capital gains realised in those foreign subsidiaries are free from UK tax.
Thus a "moneybox" company - an offshore vehicle designed to hold cash on behalf of a parent company - can avoid paying any tax on gains made to that cash pile by investing in an asset, such as an office building, and then selling it for a capital gain later.
If the offshore company just kept the money in the bank, it would be liable to income tax in Britain on the interest generated by that account.
The Chancellor is thought to be preparing a measure that will close the capital gains loophole, in the hope of improving government receipts from capital gains tax.
Last year, the tax raised pounds 900m - which is enough to fund the National Health Service for 10 days.
The Chancellor is also expected to target offshore tax avoidance by individuals who spend a year or more working abroad.
Currently such people can realise capital gains while working outside the UK, and repatriate them on their return without being liable to UK tax.
Fracking is turning the US into a bigger oil producer than Saudi Arabia
Missing Malaysia Airlines plane: Details emerge of two young Iranians using stolen passports in search for a better life
Three-quarters of Britons are saying it wrong - the top ten most common mispronunciations
Oscar Pistorius trial: Athlete's friend asked him if 'he was f***ing mad' after shooting through sunroof
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Exclusive: Impact of immigrants on British workers ‘negligible’
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 1 Three-quarters of Britons are saying it wrong - the top ten most common mispronunciations
- 2 Watch: The student election Macklemore parody that isn't completely awful - and all the others that are
- 3 Son attacks Apple after it refuses to unlock his late mother’s iPad
- 4 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 5 First Kiss video: Filmmaker gets 20 strangers to make out on YouTube with awkward results
iJobs Money & Business
£57000 - £77000 per annum + Benefits: Pro-Recruitment Group: Top 10 Specialist...
£350 - £450 per day: Harrington Starr: Harrington Starr are currently working ...
£40000 - £60000 per annum: Harrington Starr: Application Support - FIX protoco...
£45000 - £60000 per annum: Harrington Starr: Application Support - OMS/EMS, FI...