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21 February 2001
Other News
Lloyd's news
Non-resident underwriters
Lloyd's have issued a bulletin to highlight two changes that took place in March 2000 to allow credit relief to be claimed by non-resident underwriters.
Section 794(2)(bb), Taxes Act 1988 (introduced by paragraph 4 of Schedule 30 to the Finance Act 2000) extends United Kingdom credit relief to all non-residents who are doing business in the United Kingdom through a branch or agency. This applies to all accounting periods that end on or after 21 March 2000.
Lloyd's news
Non-resident underwriters
Lloyd's have issued a bulletin to highlight two changes that took place in March 2000 to allow credit relief to be claimed by non-resident underwriters.
Section 794(2)(bb), Taxes Act 1988 (introduced by paragraph 4 of Schedule 30 to the Finance Act 2000) extends United Kingdom credit relief to all non-residents who are doing business in the United Kingdom through a branch or agency. This applies to all accounting periods that end on or after 21 March 2000.
Other News
Lloyd's news
Non-resident underwriters
Lloyd's have issued a bulletin to highlight two changes that took place in March 2000 to allow credit relief to be claimed by non-resident underwriters.
Section 794(2)(bb), Taxes Act 1988 (introduced by paragraph 4 of Schedule 30 to the Finance Act 2000) extends United Kingdom credit relief to all non-residents who are doing business in the United Kingdom through a branch or agency. This applies to all accounting periods that end on or after 21 March 2000.
The new legislation therefore applies to all non-United Kingdom resident Lloyd's members world-wide in respect of foreign tax paid on their Lloyd's income and has effect from 1999-2000 onwards. Members of Lloyd's resident in all other countries will be able to claim credit relief for non-United Kingdom tax paid on their Lloyd's income. This is, however, subject to the restriction on 'own country tax' described below.
Also on 21 March 2000, the Revenue announced that residents of other European Union and European Economic Area states would be entitled to claim credit relief for past years in respect of the profits of their United Kingdom branches. This affects Lloyd's members who are resident, or were resident for the relevant year of assessment, in any of the following territories: Belgium, Denmark, Germany, Greece, Spain, France, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Austria, Portugal, Finland, and Sweden.
The Revenue's statement followed the judgment of the European Court of Justice of 21 September 1999 in Compagnie de Saint-Gobain v Finanzamt Aachen-Innenstad (Case C-307/97). In that case the court decided that Germany could not deny a French resident company with a German branch double taxation relief in respect of the income of the branch if relief would be allowed to a German resident. Although credit relief is not, strictly speaking, available in respect of 'own country tax', see below for details of how the Revenue will deal with claims for years up to and including 1998-99 in practice.
Individuals resident in the European Economic Area need not rely on the commencement date for section 794(2)(bb), Taxes Act 1988 to claim credit relief, as they can claim relief for past and current years by virtue of the European Court of Justice decision.
Any claims to credit relief for past years, to replace deduction relief, should be sent to the member's usual tax office. Claims are subject to the normal time limits, which means that members will generally be able to go back and revise the position for 1994-95 and following years if they wish to do so.
Own country tax
United Kingdom credit relief will not be given in respect of taxes that are paid in the member's own country of residence. For these taxes, if applicable, only deduction relief will be available. In practice for years up to and including 1998-99, this restriction applies to only two countries, namely France and Belgium. However, the Revenue has confirmed that it will not seek to apply the own country restriction for years up to and including 1998-99.
The restriction for own country tax will, however, be applied to all members who claim credit relief for 1999-2000 and subsequent years. This restriction will apply to all members worldwide.
A breakdown of foreign tax by country is being shown on the revised forms CTA1 for 1999-2000 and on forms CTA1 for subsequent years.
(Source: Lloyd's Market Bulletin dated 13 February 2001.)
Obituary
Douglas Pyne-Gilbert
Douglas, a past president of the Chartered Institute of Taxation, died on 10 February after a heart attack.
His date of birth was 1.9.1919 of which he was proud! (His date of death, 10.2.01 has a similar curiosity as a palindrome.) In the Royal Air Force 1940-46 he was a wireless operator and flying instructor on single-engined aircraft, seconded part of the time to the Fleet Air Arm and to India. He then joined Thorne Lancaster & Co, chartered accountants, qualifying in 1955 and leaving in 1964 to start his own practice, which he ran until he was over 80. Surprisingly, he was a founder member of the Institute of Builders Merchants.
He joined the Institute of Taxation in 1955 and was active in London Branch from its formation in 1957, helping to plan its first Trinity Conference in March 1967. He was on the Institute Council 1963-83, serving as President 1970-71.
He was a founder member of the Guild of Tax Advisers in 1995, serving as its Master 1998-99. His interests included architecture, art, aeronautics, horticulture and travel.
We extend our deepest sympathy to his widow, Margaret, and his family.
Lloyd's news
Non-resident underwriters
Lloyd's have issued a bulletin to highlight two changes that took place in March 2000 to allow credit relief to be claimed by non-resident underwriters.
Section 794(2)(bb), Taxes Act 1988 (introduced by paragraph 4 of Schedule 30 to the Finance Act 2000) extends United Kingdom credit relief to all non-residents who are doing business in the United Kingdom through a branch or agency. This applies to all accounting periods that end on or after 21 March 2000.
The new legislation therefore applies to all non-United Kingdom resident Lloyd's members world-wide in respect of foreign tax paid on their Lloyd's income and has effect from 1999-2000 onwards. Members of Lloyd's resident in all other countries will be able to claim credit relief for non-United Kingdom tax paid on their Lloyd's income. This is, however, subject to the restriction on 'own country tax' described below.
Also on 21 March 2000, the Revenue announced that residents of other European Union and European Economic Area states would be entitled to claim credit relief for past years in respect of the profits of their United Kingdom branches. This affects Lloyd's members who are resident, or were resident for the relevant year of assessment, in any of the following territories: Belgium, Denmark, Germany, Greece, Spain, France, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Austria, Portugal, Finland, and Sweden.
The Revenue's statement followed the judgment of the European Court of Justice of 21 September 1999 in Compagnie de Saint-Gobain v Finanzamt Aachen-Innenstad (Case C-307/97). In that case the court decided that Germany could not deny a French resident company with a German branch double taxation relief in respect of the income of the branch if relief would be allowed to a German resident. Although credit relief is not, strictly speaking, available in respect of 'own country tax', see below for details of how the Revenue will deal with claims for years up to and including 1998-99 in practice.
Individuals resident in the European Economic Area need not rely on the commencement date for section 794(2)(bb), Taxes Act 1988 to claim credit relief, as they can claim relief for past and current years by virtue of the European Court of Justice decision.
Any claims to credit relief for past years, to replace deduction relief, should be sent to the member's usual tax office. Claims are subject to the normal time limits, which means that members will generally be able to go back and revise the position for 1994-95 and following years if they wish to do so.
Own country tax
United Kingdom credit relief will not be given in respect of taxes that are paid in the member's own country of residence. For these taxes, if applicable, only deduction relief will be available. In practice for years up to and including 1998-99, this restriction applies to only two countries, namely France and Belgium. However, the Revenue has confirmed that it will not seek to apply the own country restriction for years up to and including 1998-99.
The restriction for own country tax will, however, be applied to all members who claim credit relief for 1999-2000 and subsequent years. This restriction will apply to all members worldwide.
A breakdown of foreign tax by country is being shown on the revised forms CTA1 for 1999-2000 and on forms CTA1 for subsequent years.
(Source: Lloyd's Market Bulletin dated 13 February 2001.)
Obituary
Douglas Pyne-Gilbert
Douglas, a past president of the Chartered Institute of Taxation, died on 10 February after a heart attack.
His date of birth was 1.9.1919 of which he was proud! (His date of death, 10.2.01 has a similar curiosity as a palindrome.) In the Royal Air Force 1940-46 he was a wireless operator and flying instructor on single-engined aircraft, seconded part of the time to the Fleet Air Arm and to India. He then joined Thorne Lancaster & Co, chartered accountants, qualifying in 1955 and leaving in 1964 to start his own practice, which he ran until he was over 80. Surprisingly, he was a founder member of the Institute of Builders Merchants.
He joined the Institute of Taxation in 1955 and was active in London Branch from its formation in 1957, helping to plan its first Trinity Conference in March 1967. He was on the Institute Council 1963-83, serving as President 1970-71.
He was a founder member of the Guild of Tax Advisers in 1995, serving as its Master 1998-99. His interests included architecture, art, aeronautics, horticulture and travel.
We extend our deepest sympathy to his widow, Margaret, and his family.
