A 29 July 2024 government policy paper announced that there would be a review of the offshore anti-avoidance legislation.
Specific mention was made in the paper of both the Transfer of Assets Abroad and Settlements income tax anti-avoidance legislation, but we now know that the review will also cover the CGT anti-avoidance legislation. The review is said to be to modernise the rules and ensure that they are fit for purpose. The following objectives were set: (i) remove ambiguity and uncertainty in the legislation; (ii) make the rules simpler to apply in practice; and (iii) ensure the anti-avoidance provisions are effective.
A Call for Evidence was published as part of the Autumn Budget documents which outlines the various provisions under review in very broad terms and poses five open ended questions:
- What could be done to simplify the legislation?
- What could be done to remove inconsistencies and align this legislation?
- What are your views on how the motive defence tests are applied and what areas of these tests could be improved.
- Do you have any suggestions on how the government should approach personal tax offshore anti-avoidance legislation in these areas going forward?
- Are there any other personal tax offshore anti-avoidance provisions the government should consider as part of the consultation.
The Call for Evidence marks the first stage of the review and is to run for 16 weeks closing on 19 February 2025. There will be a review of responses and other evidence and then a formal consultation in 2025 with respect to “areas for improvement” identified. It is reasonably clear that the government is anticipating making changes to the legislation but not before the start of 2026/27.