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On the Hunt for Financial Services (and Tax) Reforms

On 9 December 2022, the UK Chancellor of the Exchequer, Jeremy Hunt, announced the “Edinburgh Reforms” of UK financial services. These reforms propose over 30 regulatory reforms that are described as intending to “unlock investment and turbocharge growth in towns and cities across the UK.”

Notwithstanding that the majority of the reforms are focused on regulatory aspects, there are several key announcements relating to UK taxation. Specifically, the UK Government has announced a public consultation on the VAT treatment of fund management as well as announcing that the UK “Investment Transactions List” will be expanded to include cryptoassets. We cover each of these announcements in detail in this BrassTax here and here.

In addition, the UK Chancellor announced that changes will be made to the UK real estate investment trust (“REIT”) regime. These changes are in addition to those made to the REIT regime by the Finance Act 2022 and are intended to further increase the attractiveness of the regime. The changes will remove the requirement for a REIT to own at least three properties in its property rental business if the REIT holds a single commercial property worth at least £20 million. The changes will also make as yet unspecified amendments to the rule that provides that a property is deemed to be sold in the course of a trade if it is sold within three years of development by the REIT and the cost of development exceeded 30 percent of the fair value of the property when acquired or on entry into the REIT regime. Both of these changes to the REIT regime will apply from April 2023.

 

 

Key Contacts

 

Adam Blakemore
Partner
T. +44 (0) 20 7170 8697
adam.blakemore@cwt.com

Linda Z. Swartz
Partner
T. +1 212 504 6062
linda.swartz@cwt.com

Jon Brose
Partner
T. +1 212 504 6376
jon.brose@cwt.com

Andrew Carlon
Partner
T. +1 212 504 6378
andrew.carlon@cwt.com

Mark P. Howe
Partner
T. +1 202 862 2236
mark.howe@cwt.com

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