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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | July 2023
HM Treasury and HMRC have published draft legislation for inclusion in the Finance Bill 2024, including two pensions-related measures.
These are:
The measures provide for a new "lump sum allowance" of £268,275 in relation to tax-free pension commencement lump sums and a new "lump sum and death benefit allowance" of £1,073,100 (the current level of the LTA) in relation to authorised lump sums and authorised lump sum death benefits. These allowances will apply across all registered pension schemes of which an individual is a member. Payments exceeding the allowances will be subject to income tax at the recipient's marginal rate. Details of these changes are set out in the Pension schemes newsletter no. 152, along with administrative issues relating to the digitisation of relief at source.
In the policy paper accompanying the draft Finance Bill are changes to the taxation of inherited pension pots where a member dies before age 75. Since 2015, it has been possible to inherit a pension pot in such circumstances free of IHT and income tax. The policy paper states that “Individuals will still be able to receive the benefits which are currently tested against the LTA, but the values will no longer be excluded from marginal rate income tax…with effect from April 6, 2024.” This has been described as a “sea change” in tax treatment of inherited benefits. More detail on the related proposed legislation is expected. It will be important to check whether the newly drafted Finance Bill maintains the tax protections currently enjoyed by death benefits under an excepted group life policy, as such policies are widely used by employers.
The consultation on the draft legislation runs until September 12, 2023.
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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