The UK government has published a policy paper which explains the introduction of a new trust rules against tax evasion, designed to prevent attempts to use the disguised remuneration schemes.
Estimated change was included in the budget 2016 and new rule applies from 16 March 2016.
The Government stated that one type of disguised scheme of tax evasion, remuneration avoidance, seeks to exploit weaknesses rules. Currently, section 552Z8 for income tax reduces the amount of charge in a disguised remuneration subject to certain conditions. The Government explained that the new rule will put beyond doubt that this scheme does not work by preventing the relief from being available where there is a connection, direct or indirect, with the mechanism of tax evasion.
The Finance Bill 2016, stated that a transitional relief will be charged on investment income after 30 November 2016. Those who used the disguised remuneration scheme prior to the introduction of new rules can get the relief adopted after their settlement.
According to the Finance Bill 2016, it will be restricted to the value of disguised remuneration. Any increase in investment on the disguised remuneration will be liable to a charge under the disguised remuneration rules.