(13 years, 6 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
On 6 April 2011 the Government announced a change in legislation to prevent tax avoidance. The Government have set out a clear strategy on preventing tax avoidance. We will not hesitate to take action to stop those who seek to take unfair advantage of unintended tax loopholes. The measure demonstrates our commitment to act quickly to close these.
Legislation published today for consultation will be introduced in Finance (No.3) Bill to prevent individuals from taking advantage of a tax loophole that would have emerged had the Government not taken action. It will provide that, notwithstanding the terms of a double taxation arrangement with another territory, a payment of a pension or other similar remuneration may be taxed in the United Kingdom where:
the payment arises in the other territory;
it is received by an individual resident of the United Kingdom;
the pension savings in respect of which the pension or other similar remuneration is paid have been transferred to a pension scheme in the other territory; and
the main purpose or one of the main purposes of any person concerned with the transfer of pension savings in respect of which the payment is made was to take advantage of the double taxation arrangement in respect of that payment by means of that transfer.
In the event that tax is paid in the other jurisdiction, appropriate credit will be available against the UK tax chargeable.
The legislation will have effect in relation to payments of pensions or other similar remuneration made on or after 6 April 2011.