George Osborne today delivered the Autumn Statement 2015. Whilst George Osborne’s speech did not focus heavily on tax, the Spending Review and Autumn Statement itself does set out various measures relating to stamp duty, capital gains tax, tax avoidance and evasion which will be of interest to the Channel Islands. We have set out the main points of the Autumn Statement below.

In many cases there is limited detail provided, and we expect more information will be included with draft legislation to be published on 9 December 2015.


In his speech, the Chancellor confirmed that the Government would look to establish a £10 billion surplus by 2019-20, would not take forward the proposed tax credit cuts (though the £12 billion of welfare savings committed to at the election will be delivered in full) and would benefit from a £27 billion improvement in public finances due to stronger than expected tax receipts and lower interest costs on borrowings.

Corporate Tax

  • Large business compliance – Following consultation, the Government has confirmed it will legislate to introduce:
  • a new requirement that large businesses publish their tax strategies as they relate to or affect UK taxation
  • a special measures regime to tackle businesses that persistently engage in aggressive tax planning
  • a framework for cooperative compliance, instead of a voluntary Code of Practice
  • Change in scope of the UK bank levy – The Government will consult on changing the scope of the bank levy to UK operations from 1 January 2021, a change which was announced in Summer Budget 2015.
  • Loans to participators – A new measure introduces a partial exemption from the loans to participator rules for certain charity transactions. The measure takes effect to loans or advances made on or after 25 November 2015. Charities may refrain from accounting for any section 455 charge which could arise between this date and Royal Assent to Finance Bill 2016. However if the exemption is not ultimately approved by Parliament then charities will be liable to the section 455 charge according to the current law.
  • Corporation tax: museums and galleries tax relief  – The Government will explore with the sector the case for introducing a new tax relief for museums and galleries.



  • Partnerships and intangible assets – New rules will clarify when intangible fixed assets held by a partnership come within the intangible fixed asset rules. The changes aim to make it clear that transfers of intangible assets to a partnership with companies as members will not circumvent the Intangible Fixed Asset commencement rules that would otherwise apply to those corporate members. The amendments will take effect for transactions that occur on or after 25 November 2015 and there will be an apportionment of the accounting debits and credits in any period that straddles 25 November 2015 where they relate to transactions that occurred prior to that date. The Government will also consider a review of the intangible assets regime as part of the Business Tax Roadmap.
  • Capital Allowances – Two clauses have been proposed which are aimed at businesses which seek to obtain tax advantages by either receiving a consideration in a non-taxable form in return for agreeing to take over tax deductible lease payments or manipulating disposal values leading to excess capital allowances. The provisions have effect from 25 November 2015.
  • Disguised remuneration – The Government has stated that it intends to take action against those who have used or continue to use disguised remuneration schemes and who have not yet paid their fair share of tax. The Government will also consider legislating in a future Finance Bill to close down any further new schemes intended to avoid tax on earned income, where necessary with effect from 25 November 2015.
  • Company distributions – The Government will publish a consultation on the rules concerning company distributions "later in the year". The Government will also amend the Transactions in Securities rules and introduce a Targeted Anti-Avoidance Rule in order to prevent opportunities for income to be converted to capital in order to gain a tax advantage.
  • Rules for addressing hybrid mismatch arrangements – The Government will introduce legislation with effect from 1 January 2017 to implement the agreed OECD rules for addressing hybrid mismatch arrangements.



  • Stamp Duty Land Tax (SDLT) on additional properties – Higher rates of SDLT will be charged on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes, from 1 April 2016. The higher rates will be 3 percentage points above the current SDLT rates. The Government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.
  • SDLT: application to certain authorised property funds – The Government will introduce a seeding relief for Property Authorised Investment Funds (PAIFs) and Co-ownership Authorised Contractual Schemes (CoACSs) and make changes to the SDLT treatment of CoACSs investing in property so that SDLT does not arise on the transactions in units. There will be a defined seeding period of 18 months, a 3 year clawback mechanism and a portfolio test of 100 residential properties and £100 million value or 10 non-residential properties and £100 million value. These changes will take effect from the date Finance Bill 2016 receives Royal Assent.
  • Annual Tax on Enveloped Dwellings (ATED) and 15% rate of Stamp Duty Land Tax: scope of reliefs – The Government will extend the reliefs available from ATED and the 15% higher rate of SDLT to equity release schemes (home reversion plans), property development activities and properties occupied by employees from 1 April 2016.
  • SDLT changes to filing and payment process – The Government will consult in 2016 on changes to the SDLT filing and payment process, including a reduction in the filing and payment window from 30 days to 14 days. These changes will come into effect in 2017 to 2018.
  • CGT – From April 2019, a payment on account of any CGT due on the disposal of residential property will be required to be made within 30 days of the completion of the disposal. This will not affect gains on properties which are not liable for CGT due to Private Residence Relief. The Government will publish draft legislation for consultation in 2016.


  • Tax free childcare – The Government will lower the upper income limit per parent from £150,000 to £100,000 and increase the minimum income level per parent from the equivalent of 8 hours to 16 hours at the national living wage.
  • Inheritance tax and undrawn pension funds in drawdown pensions – The Government will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.
  • Entrepreneurs' relief – After much press coverage in the run up to the Autumn Statement, the only announcement is that the Government will consider bringing forward legislation to amend the changes made by Finance Act 2015 to entrepreneurs’ relief, in order to support businesses by ensuring that the relief is available on certain genuine commercial transactions.
  • Pensions tax relief consultation – At Summer Budget 2015, the Government launched a consultation on the system of pensions tax relief. The Government has confirmed it is considering the responses received and will publish its response at Budget 2016.
  • Taxation of asset manager’s performance based rewards – As expected, the Government has confirmed it will introduce legislation to determine when performance awards received by asset managers will be taxed as income or capital gains. An award will be subject to income tax, unless the underlying fund undertakes long term investment activity.


  • Employment intermediaries and tax relief for travel and subsistence – As confirmed at Summer Budget 2015, the Government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries legislation applies. This change will take effect from 6 April 2016.
  • Company Car Tax diesel supplement – From April 2016 the 3% differential between diesel cars and petrol cars will be retained until April 2021.
  • Apprenticeship levy – The Government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s paybill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any paybill in excess of £3 million.
  • Taxation of accommodation benefits – Following recommendations from the 2014 OTS report on simplifying the administration of employee benefits and expenses, the Government will publish a call for evidence on the current tax treatment of employer provided living accommodation.
  • Salary sacrifice – The Government remains concerned about the growth of salary sacrifice arrangements and is considering what action, if any, is necessary. The Government will gather further evidence, including from employers, on salary sacrifice arrangements to inform its approach.

Indirect taxes and other stamp duties

  • Stamp Duty and Stamp Duty Reserve Tax Deep In The Money Options (DITMOs) – Shares transferred to a clearance service or depositary receipt issuer as a result of the exercise of an option will now be charged the 1.5% higher rate of stamp duty based on either their market value or the option strike price, whichever is higher. This will prevent avoidance using DITMOs, which are options with a strike price significantly below (for call options) or above (for put options) market value. Share transfers made other than to a clearance service or depositary receipt system as a result of exercising an option will be unaffected. The change will apply to options which are entered into on or after 25 November 2015 and exercised on or after Budget 2016.



  • Enterprise Zones – The Government will expand the Enterprise Zone programme in England with the announcement of 18 new sites across the country and the extension of 8 sites on the current programme.


Tax Administration

  • General Anti-Abuse Rule (GAAR) – The Government will introduce a new penalty of 60% of tax due to be charged in all cases successfully tackled by the GAAR. The Government has also noted that it will make small changes to the way the GAAR works to improve its ability to tackle marketed avoidance schemes.
  • Tax avoidance and evasion – the Government will take forward its proposals consulted on in respect of serial avoiders and new offences for tax evasion including a new criminal offence for corporates which fail to prevent their agents from criminally facilitating tax evasion by an individual or entity. It will also consult on an additional requirement for individuals to correct any past offshore non-compliance with new penalties for failure to do so.
  • Cash and tax evasion – HMRC has launched a call for evidence which seeks a better understanding of the link between cash, evasion and the hidden economy. This is part of the Government's commitment to a crack down on tax evasion.
  • Making tax digital – The Government will publish its plans to transform the tax system into one of the most digitally advanced tax administrations in the world shortly and will consult on the details in 2016.

As part of HMRC's settlement at the spending review there is £800 million confirmed funding for additional work to tackle evasion and noncompliance in the tax system. This is forecast to deliver an additional £7.2 billion over the next 5 years.

Whilst many of the measures above will be specific to businesses or individuals based in the UK, there are a number of measures which could affect Islanders. Of particular interest will be the proposed increase in stamp duty for buy to let property and second homes. In his speech the Chancellor referred to the fact that in many cases these properties are owned by non-UK residents. We will keep you updated once draft legislations and consultations are released.