Rowena Mason noted in the Guardian yesterday that Sunak has not made many big statements on tax. Nor has he had a lot to say on tax havens.
But as she also noted:
Sunak … brought in a new low-tax scheme that is partly designed to benefit some wealthy non-dom investors, just days before his national insurance risehit millions of working people at the height of a cost of living crisis.
The new scheme – the qualifying asset-holding company regime – specifically mentions fund manager non-doms as a category of people who can benefit by not having to pay tax on foreign earnings through the new vehicles.
The point of the whole scheme is to try to attract asset managers from low-tax jurisdictions such as Ireland and Luxembourg. In the view of Richard Murphy of Tax Research UK, this is a first step towards “Singapore-on-Thames” in a post-Brexit Britain, the goal being to “encourage the flow of funds through a jurisdiction with little or no tax being paid”.
I am, apparently, one of very few to have actually commented on this scheme on the web. Where are the rest looking? The wrong way, by the look of it.
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Teresa Owusu-Adjei, Trevor James, Sophie Allen, Kirsten Banks, Elena Rowlands, Simon Skinner, Russell Warren, Jonathan Goodall, Sophie Lloyd and many others have commented online on the scheme.
Many of them are tax experts and have post-graduate qualifications if you think they don’t count as you’ve never heard of them.
Journalists do not find them
Surprise surprise all the names mentioned above are individuals from the big 4, magic circle, asset management industry.
Just so people understand what we are talking about, this is paragraph 46 of Schedule 2 to the Finance Act 2022. https://www.legislation.gov.uk/ukpga/2022/3/schedule/2/enacted
Here is what HMRC say about it in their Investment Funds Manual: https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm41010
The new QAHC rules only came into effect on 1 April, but there is some technical commentary on the web, for example: https://www.pinsentmasons.com/out-law/guides/uk-asset-holding-company-regime
Whether this is a good idea is a policy question. But the intention is, I think, to remove an impediment on UK companies being used to hold assets for investors. Without it, investment fund managers would continue to prefer to hold assets through similar companies in say Luxembourg or Ireland, as they have for many years.
This came out of a consultation process that started in March 2020. https://www.gov.uk/government/consultations/tax-treatment-of-asset-holding-companies-in-alternative-fund-structures
Off topic.. Not sure I’ve seen this mentioned on the blog :
The government have ended entitlement for Warm Home Discount (c. £150 contribution toward energy bills) for people who receive PIP or DLA alone.
They’ve extended the scheme to those who receive housing benefit which is good and makes sense – whilst pulling the plug on 210,000 (-disability rights uk) disabled who receive only those benefits.
In this category you will most probably encounter people with disabilities who are.. in work (typically low earners)… pensioners.. possibly asset rich / cash poor ie. own their own propertly or live rent free with little cash flow.
It is callous
Sunak has a history of links to avoidance. He worked at TCI Fund Management, which has links to the Cayman islands and was founded by Patrick Degorce, well known user of failed avoidance schemes re film losses.