HMRC have launched a consultation which seeks to gather evidence about the potential impact of withdrawing 3 Extra Statutory Concessions (ESCs), including a rowing back on applying income tax to income from testimonials. A consultation has also been launched looking at draft legislation to preserve the effect of two ESCs.

By way of reminder, the House of Lords’ decision in the Wilkinson case clarified the scope of HMRC’s administrative discretion to make concessions that depart from the strict statutory position. HMRC is therefore reviewing its concessions.

The majority can remain as they are, but some are now considered to be beyond the scope of HMRC’s discretion. Of these, some can be legislated to preserve their effect; others will need to be withdrawn.

This consultation provides details of 3 extra-statutory concessions that need to be withdrawn as part of the review and gives notice of their withdrawal with effect from 6 April 2016. The 3 ESCs it is proposed to remove are:

• Employment Income Manual 03002 - Professional remuneration (Income Tax)
• Sports Testimonials (Income Tax)
• D45 Capital Gains Tax: roll-over into depreciating assets (Capital Gains Tax)

Comments are requested by 8 January 2015.

HMRC are also seeking comments on whether draft legislation maintains the purpose and effect of the following ESCs:

• D40: Non-resident trusts: definition of participator (Capital Gains Tax)
• F15: Woodlands (Inheritance Tax)

Comments are requested by 27 November 2014.