Legal Updates

Passive income reforms ''to be scrapped''

Date:  21 Jul 2008

Proposed reforms to the law regarding taxation on foreign profits could be abandoned, it has been reported.

According to the Financial Times, chancellor Alistair Darling is set to scrap plans to tax "passive" income from around the world, as he strives to prevent firms from leaving British shores.

The measures, announced in a Treasury discussion document last year, would have seen income from streams such as rents, dividends and royalties taxed irrespective of geographical origin.

Critics said the move would particularly hit businesses with a large amount of intangible assets.

A Treasury official suggested the decision was a "sensible, positive reaction" to the feedback received; adding that he believed it would be welcomed by business.

He added: "Business felt the changes [to the anti-avoidance] rules were not acceptable or workable and we’re talking with them to resolve those concerns."

The current chancellor has been forced to back-track on a number of occasions during his incumbency, on subjects such as income tax and fuel duty.

Vizards Tweedie act for small and medium businesses and deal with all aspects of company and commercial law

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