KPMG’s Matthew Herrington and Greg Smythe take a detailed look at the updated hybrids guidance and legislative amendments in Finance Bill 2018.
On 1 December 2017, Finance Bill 2018 was published. The Bill contained a number of amendments to the hybrid and other mismatches legislation, most of which are retrospective back to 1 January 2017, with the remainder applying from 1 January 2018. In addition, on 29 November 2017, HMRC published a draft of their updated guidance on the legislation, which assists in understanding how they expect the rules to be applied in practice. These amendments include: extending the recognition of dual inclusion income in some chapters; deeming a mismatch to arise by reason of a company operating through a permanent establishment in a specified case; further clarifications on when unilateral deductions are outside scope; recognising capital taxes in specific circumstances; and putting beyond doubt some stances HMRC took in prior drafts of their guidance by legislating for them.
In a recent article for Tax Journal*, Matthew Herrington and Greg Smythe from KPMG in the UK’s international tax practice take a detailed look at the updated guidance and proposed amendments to the legislation, including:
* First published in Tax Journal on 26 January 2018. Reproduced with permission.
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