• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/7/2013

United Kingdom - Proposals to revise loan, derivative, bank taxation 

June 7: The UK government published several consultation documents and draft guidance that would amend: (1) the corporate tax rules on loan relationships and derivative contracts; (2) the rules relating to the code of practice on taxation for banks; (3) the rules concerning the foreign exchange market; and (4) the controlled foreign company (CFC) regime.
  • A consultation document [PDF 374 KB] has been published under a proposal to amend the corporate tax rules on corporate debt / loan relationships and derivative contracts under future legislation (2014 and 2015 Finance Bills). The proposals would focus on areas for which there is a risk of “tax leakage” and on "structural changes.” Comments are due by 29 August 2013.

  • A consultation document [PDF 190 KB] has been published under a proposal to strengthen the consistency of the application of the code of practice on taxation for banks, specifically, bank compliance to the tax rules. Comments are due by 16 August 2013.

  • Draft regulations would amend the rules for determining how exchange gains and losses on loan relationships or derivative contracts that have been deferred because they are matched with shares, ships or aircraft are to be brought into account. The proposal provides that such exchange gain or loss would be calculated in the same currency as used to calculate the capital gain or loss on the disposal of the matched asset. Comments are due by 2 July 2013.

  • Updated draft guidance concerning the new controlled foreign company (CFC) regime has been published, containing new chapters on clearance procedures and the interaction with the branch exemption.

Also included in the report are the following topics

  • FATCA - Guidance and regulations
  • Changes to double taxation treaty passport scheme
  • SDLT subsale rules - Further anti-avoidance
  • Consultation - Community amateur sports clubs
  • Consultation - Offshore employment intermediaries
  • Consultation - Unapproved share schemes
  • Consultation - Simplification of IHT periodic and exit charges for trusts
  • SEIS - HMRC publish FAQs
  • VAT consultation - Treatment of refunds made by manufacturers
  • VAT Upper Tribunal Decision - W M Morrison Supermarkets Ltd

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