Other measures announced

Landline duty

As announced in the Digital Britain White Paper published in June 2009, a new duty will be introduced to help fund the roll-out of Next Generation Access (super-fast broadband). The duty is a 50p per line per month charge on landlines and applies to owners, wholesalers, retailers and end users of ‘local loops’ (a local loop is defined as the physical circuit connecting a network termination point to a public electronic communications network). It will apply on and after 1 October 2010.

Financial Services Compensation Scheme (FSCS)

Intervention by the FSCS can include the provision of financial assistance to an insurer, transferring policyholders’ rights to another insurer or paying compensation to the policyholder.

A wide range of rules applies in connection with taxable and tax advantaged insurance and annuity products. However interventions under the FSCS may give rise to unintended tax consequences, such as the loss of tax advantaged status.

Finance Act 2009 introduced a regulation-making power to address tax impacts arising from FSCS interventions affecting pension saving with insurers. Finance Bill 2010 will introduce a regulation-making power to address tax impacts arising from interventions by the FSCS affecting mainly savings, investments and annuities outside pension schemes.

Regulations made using the powers in this measure will ensure that there will be broadly the same tax treatment for the continued cover or resulting payments as if the FSCS had not intervened. The regulations can apply to a period before they are made, provided they do not increase any person’s tax liability.

National Employment Savings Trust (NEST)

Changes will be made to the pensions tax legislation as soon as possible in the next Parliament to enable the NEST to operate as a registered pension scheme. The measures will:

• allow NEST to register z with HMRC for tax purposes, and to be subject to the same tax rules as other tax-registered pension schemes
• remove the tax liability on any interest charges on late pension contributions made by an employer to qualifying pension schemes
• provide a regulation-making power to deal with any unintended tax consequences that may emerge as a result of the implementation of NEST and the employer duties and compliance as set out in the Pensions Act 2008
• remove the tax charge on borrowing linked to the cost of establishing and operating a registered pension scheme, subject to conditions.

Trusts for asbestos victims

The Government announced its intention to introduce legislation in the next Parliament to help trusts specifically set up to compensate asbestos victims, but which have been unable to access tax-efficient structures for the benefit of victims. The legislation will apply retrospectively to April 2006.

Anti-avoidance: Transactions in securities

Legislation will be introduced in Finance Bill 2010 to replace the existing transactions in securities legislation with clearer legislation targeted more effectively at arrangements involving income tax avoidance.

Tax incentive for British video games industry

The Government announced in the Budget its intention, subject to State aid approval, to introduce a new tax relief for the UK video games industry, aimed at supporting game development in the UK. It will be introduced once the detailed design has been settled, and the relief is approved by the European Commission. The Government will be consulting later this year on the design of the new relief.

Special guardianship and residence orders

A new measure will mean that certain payments to special guardians, and to certain carers looking after children under a residence order, will be exempt from income tax.

The new exemption will be similar to the current tax exemption for payments to adopters and will have effect for payments received on or after 6 April 2010.