ICAEW has heavily criticised proposals and guidance issued in relation to the reform of the matching rules within the Transfer of Assets Abroad (TOAA) regime, saying these are too complex and contrary to EU law.

The ICAEW's comments were made in a response to a consultation which closed earlier this month. This was set up to look at how changes to rules for matching the benefit received by a UK resident individual to the income of a person aboard under the benefits charge could be made compliant with EU law while protecting the Treasury.

However, ICAEW says the TOAA legislation as amended by Finance Act 2013 adds to the complexity of legislation which the institute says was already' incoherent and overly complex'. It also argues that the proposed changes are not in keeping with the underlying EU case law.

ICAEW is calling for a root and branch reform of the legislation, saying that in some circumstances taxpayers could, under the current guidance, find themselves faced with significant tax liabilities in connection with income they cannot benefit from.