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Retrospective taxation 'a growing concern' in Britain

Retrospective personal and corporate taxation is a growing concern in the UK, it has been claimed.

The apparently increased use of tax tweaks that apply to actions already taken by taxpayers is "inherently unfair", according to the Chartered Institute of Taxation (CIOT).

John Whiting, tax policy director at CIOT, believes that the most recent amendment to personal tax planning rules damages the key principle of certainty in the tax system.

He was commenting on the announcement by financial secretary to the Treasury Stephen Timms last week of an change to laws concerning manufactured dividends that will apply from October 1st 2007.

Mr Whiting said: "We can understand that at times the government wants to take action to 'confirm the general understanding of the tax system' in the light of questions raised.

"However ... it must not dislodge the principle that the taxpayer is taxed on the wording of the legislation in place at the time of their actions."

The comments come after Brits undertaking personal tax planning were warned in an article by the Telegraph of the importance of considering countries that are not ordinarily considered offshore tax havens.

According to the newspaper, France, Spain, Portugal and Malta are all countries where gains on inheritance tax and income tax can be made.

Posted by Jon Cummins