Owner-Managed Businesses

Legislation Day 2021 summary

Produced by Tolley
  • 16 May 2022 11:02

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Legislation Day 2021 summary
  • Introduction
  • Direct taxes
  • Basis period reform for unincorporated trading businesses
  • Structures and buildings allowances (SBAs): amendment to allowance statement
  • Real estate investment trusts: amendments
  • Amendments to the hybrid and other mismatch rules
  • Taxation of asset-holding companies in alternative fund structures
  • Increasing the normal minimum pension age
  • Pension scheme pays reporting: information and notice deadlines
  • More...

Legislation Day 2021 summary

Introduction

The initial draft clauses for the Finance Act 2022 were published on 20 July 2021 and include more detail on previously announced proposals. Whilst the Government refers to it as draft legislation for Finance Bill 2021/22, in this commentary, for clarity, it is referred to as Draft Finance Bill 2022. The final contents of the Bill will be subject to confirmation at a later date, expected to be in the Autumn, though it is uncertain whether this will be combined with an Autumn Budget.

Direct taxes

Basis period reform for unincorporated trading businesses

The Government is introducing a reform of basis periods for unincorporated trading businesses in draft FB 2022 whereby businesses will be taxed on the profits arising in a tax year for 2024/25 with a transitional year in 2023/24. The draft clauses note that commencement of these provisions is from 2023/24 with a transitional year in 2022/23; but since the publication of the draft clauses, the Government announced that the basis period reform would be deferred a year. The reformed basis period is different to the current year basis in force at the moment which uses the general rule that a basis period for a tax year is the 12 months ending with the accounting date in that tax year together with additional rules for the opening and closing years of a business and when there is a change in the accounting period end. The operation of the current rules in the early years of a business

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