Weekly Tax Update - 18 April 2016

1. General news

   1.1 Additional 3% SDLT charge and granny flats

   Financial Secretary to the Treasury, David Gauke, has clarified to the House of Commons that the Government will table an amendment to ensure that a 'granny annexe' of a main dwelling, or, we infer, the main dwelling itself, will not attract the additional 3% SDLT charge for second homes.

   He commented on 11 April 2016 as follows:

   "I have been made aware that the Bill as drafted might lead to some main houses with an annexe for older relatives attracting the higher rates of SDLT intended to apply to additional properties. I thank my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles) for bringing that to my attention. I am happy to reassure the House that that is not our intention and the Government will table an amendment in Committee to correct the error and ensure fair treatment for annexes."

   Press reports indicate that to qualify for the relief an annexe must:

   be within the same grounds as the main residence; have the usual facilities of a home; and have a value not exceeding 1/3 of the total transaction cost. If the Finance Bill amendment is drafted in these terms, a house costing £0.5m could have an annexe for an elderly relative or disabled dependant valued at up to £250k and be excluded from the higher SDLT rate.

   https://hansard.parliament.uk/commons/2016-04-11/debates/16041114000001/Finance(No2)Bill

   1.2 Beneficial ownership information in Crown dependencies and overseas territories

   On 11 April 2016, the Prime Minister announced that agreement had been reached with the majority of Crown dependencies and overseas territories to give UK law enforcement and tax agencies access to information on beneficial ownership of companies.

   The Crown dependencies and overseas territories that function as financial centres had already agreed to exchange taxpayer financial account information automatically. They have now agreed to provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies. Arrangements have been finalised with all but Anguilla and Guernsey, both of which are expected to follow in the coming days and months.

   The extract from the Hansard record is as follows:

   'For the first time, UK police and law enforcement agencies will be able to see exactly who really owns and controls every company incorporated in those territories: the Cayman Islands, British Virgin Islands, Bermuda, the Isle of Man, Jersey—the lot. That is the result of a sustained campaign, building on the progress that we made at the G8, and I welcome the commitment of the Governments of those territories to work with us and implement those arrangements.

   'The House should note that that will place our overseas territories and Crown dependencies well ahead of many other similar jurisdictions, and alsocruciallyahead...