Highly geared infrastructure companies may face higher tax charges.
From 1 April 2017, the UK will introduce new rules to limit tax deductions for interest expense and other similar financing costs, with the aim of aligning such deductions with the economic activities undertaken in the UK. The existing debt cap rules will be repealed and replaced with the new rules.
The new rules will restrict the ability of large businesses to reduce their taxable profits through UK interest expense. They are part of the government’s wider changes to encourage alignment of the location of taxable profits with the location of economic activity, and are consistent with the UK’s more territorial approach to corporate taxation.
KPMG’s tax specialists can help companies work through and potentially minimise the impact of the changes.
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