With the end of the transition period for the UK to leave the EU on 31 December 2020, there is still significant uncertainty about the details of the UK’s relationship with the EU from 1 January 2021.
There are several areas where UK direct taxes (broadly taxes on income and gains rather than sales) have been heavily influenced by EU law. From 1 January, the UK Government is likely to be free to change tax rules without having to consider whether any changes comply with EU law.
In this post, we highlight just a few of the areas where EU law has had a significant influence on UK tax rules applying to private clients and what changes might be expected in the future.
| Income tax-free personal allowance | Currently, a European Economic Area (EEA) national is entitled to a personal allowance even if they are not resident in the UK. This does not apply to nationals of other countries. The personal allowance is worth up to £5,000 per year and represents a major benefit for EEA nationals. |
| Pension Transfers | Individuals can currently transfer their UK pension to certain overseas pension schemes (the qualifying recognised overseas pension schemes (QROPS)). However, a 25% tax charge applies unless the taxpayer is resident in the same country as the QROPS or both are resident in the EEA. So, a UK resident could currently transfer their UK pension to a Maltese QROPS without a tax charge but not to an Australian one. |
| Agricultural land | Agricultural land in the EEA can qualify for an exemption from UK Inheritance Tax and also potentially valuable Capital Gains Tax reliefs which are not available on land situated elsewhere. |
| Furnished Holiday Lets (‘FHLs’) | Rental properties in the EEA can qualify as FHLs. FHLs are entitled to a range of tax benefits compared to a standard property business. |
| Charitable donations | Only charitable donations to UK and EEA charities can qualify for UK tax relief. |
| Anti-avoidance provisions | Certain anti-avoidance rules which apply to offshore trusts and companies contain exemptions where the entity is based in an EU member state. |
UK individuals with assets in the EEA, and vice versa, should review their position to identify any areas where they received beneficial tax treatment as a result of the UK’s membership of the EU and consider alternative approaches should the rules change. Individuals relying on exemptions from UK anti-avoidance rules based on EU law should consider their position if these exemptions were removed.
On a more positive note, we may see beneficial tax arrangements being extended to non-EEA countries as part of the UK’s drive to forge stronger global trading relationships which might make investment into the UK more attractive.
The UK Spring Budget on 6 March 2024 was relatively measured in its tax policy decisions, despite a background of falling inflation and rising tax receipts. Below are some areas of interest for globally mobile individuals, those with UK staff, and those with business and investment interests. Main measures affecting individuals Main measures affecting those […]
A package of significant tax legislation changes came into force in Poland with effect from 1 January 2022. Dubbed the Polish Deal, these changes were intended to ‘tighten up the tax system’ and deliver a more progressive tax framework. However, they primarily involved a greater burden on a large number of taxpayers, which has subsequently […]
Digital assets and cryptocurrencies continue to evolve by offering new services and products such as Decentralized Finance (DeFi) and non-fungible tokens (“NFTs”), but is tax legislation also keeping up to date with the ever-changing world of digital assets and cryptocurrencies?
Federal income versus transfer tax The US taxes its citizens and residents on their worldwide income but also levies a gift, estate and generation-skipping transfer tax (GSTT) on worldwide assets of both citizens and individuals domiciled in the US. A non-citizen is subject to US income tax when they become a resident. Transfer tax applies […]
Legal entities and certain legal arrangements within the scope of Peru’s disclosure rules are obliged to implement suitable mechanisms allowing the collection and storage of data relating to the identity of their Ultimate Beneficial Owner (UBO). This information supports the data that must be shared with the Peruvian tax authorities by filing a UBO informative […]
The currently applicable double tax treaty between France and Belgium was concluded in 1964 and then amended many times until 2009. After several years of negotiations, Belgium and France finally signed a new double tax treaty (hereafter, the “new Treaty”). The 1964 Treaty remains applicable until the new Treaty has been ratified by the French […]
In this blog post we focus on the situation of individuals residing in Belgium who hold real estate property located in France, looking specifically at the changes introduced by the new Treaty. National provisions have not been changed by this new Treaty, so additional French and Belgian taxes thus remain fully applicable
Guidelines on the taxation of cross-border workers during the Covid-19 pandemic and an update on PEPP as defined in the latest budget laws in Luxembourg.
Many jurisdictions have refined and improved their legislative defenses against tax avoidance in recent years, making the penalties for tax fraud even tougher.
Choosing a business location involves many considerations, with tax being only one of them. Nevertheless, tax is a consideration. Below is a note commenting on the attractions of Switzerland as a business location. There may of course be other locations that should be considered. Switzerland attracts global business, research, and innovation, and maintains the high ground […]
Government’s around the world have acted to help support individuals and businesses to get through to Covid pandemic. Mazars Covid-19 global tax and law tracker provides an overview of the measures different jurisdictions have put in place and there is a range of information and webinars at the above link. In this article we focus […]
With the Covid-19 crisis, working from home is expected to become the “new normal”. 2020 marks the end of many tax holidays with respect to home working arrangements within and between certain countries. We have already featured some general comments on the implication of remote working in previous blog posts; and we will regularly feature […]
Near-term objective of the South African Revenue Service confirmed: “Remaining focused on international taxes, particularly aggressive tax planning using transfer pricing.” The South African (“SA”) economy, like many others, has been severely impacted by the Covid-19 pandemic. A recent speech by the country’s Finance Minister painted a dire picture of a country that is, in […]
Generally speaking, year-end is that time of year when we clean up all open items in the current year and head into the new year with a fresh outlook and perspective. This also applies to tax. You cannot be blind to the overwhelming number of tax checklists published to help individuals, in particular, get their tax affairs […]
This website uses cookies.
Some of these cookies are necessary, while others help us analyse our traffic, serve advertising and deliver customised experiences for you.
For more information on the cookies we use, please refer to our Privacy Policy
This website cannot function properly without these cookies.
Analytical cookies help us enhance our website by collecting information on its usage.
We use marketing cookies to increase the relevancy of our advertising campaigns.