Andre Agassi, whose earnings were made subject to British taxes by the House of Lords
Millionaire foreign footballers will be among the biggest winners from the Finance Bill which proposes to exempt their worldwide earnings from UK taxes but more British families will have to pay inheritance tax (IHT).
Other changes include removing references to ?idiots, lunatics and insane persons? from the fiscal statutes and allowing people with small pensions to take them as cash rather than having to buy an annuity.
Mike Warburton of accountants Grant Thornton explained: ?The House of Lords ruled a few years ago that part of tennis player Andre Agassi?s international endorsements income was subject to tax in Britain.
?Unfortunately, this approach had the unintended consequence that Britain has lost international sporting events ? such as last year?s Uefa Final ? and the economic activity they generate.
?As a result, those attending the Olympics next summer have been exempted from this ruling and now the Finance Bill proposes to extend that to the Uefa Champions League Final 2013.?
While a few foreigners will gain from the Bill hundreds of British families will lose. George Bull of accountants Baker Tilly said: ?In every Finance Bill, there are winners and losers. For the 900 extra families who will find they have to pay inheritance tax on the death of a loved one, this Bill will be very bad news indeed.
?The announcement that the consumer prices index (CPI) rather than the retail prices index (RPI) would be used to update the IHT nil rate band is part of the change of indexation for many taxes, set to raise an extra ?1bn per annum for the Exchequer by 2015/16.
?As a result of the reduced indexing, around 1,500 estates will have to complete the long IHT400 form instead of the shortened IHT205 form in 2015/16.
?It?s not only the extra tax that will have to be paid. HMRC estimate that the additional cost of completing the longer tax return is between ?45 and ?55. In our experience, this is completely unrealistic. I shouldn?t think there is a lawyer or accountant in the land who could complete it for the ?55 proposed by HMRC.?
Tom McPhail, pensions expert at wealth managers Hargreaves Lansdown, pointed out: "The government has confirmed that it from April 2012 it will introduce new flexibility for pension savers with small pension pots, allowing them to take their fund as a one off lump sum rather than having to buy an income with it.
"HMRC estimates that this will affect around 25,000 people who are aged over 60, who who have an individual pension pot worth less than ?2,000. They will no longer have to buy an annuity and will instead be able to take their savings as a lump sum. For example, a pot of ?1,000 would provide a 65 year old man with an income of around ?5 a month."
Elsewhere, Robin Williamson of the Low Incomes Tax Reform Group (LITRG) said: ?We applaud the action that ministers and HMRC have taken to remove the offensive language that defines ?incapacitated person? in tax legislation.
?For too long, people with disabilities of a kind which prevents their being able to handle their tax and financial affairs have been referred to as ?idiots, lunatics and insane persons? in the Taxes Acts. In the modern age this is at best dismissive, at worst downright insulting.?
All the more so when a survey of MPs a few years ago found that most of them employ accountants to fill in their tax returns. When even the people who create our tax laws find them too complex to cope with unaided, it really is time for simplification.
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