A round up of other news this week.
The Supreme Court (UKSC) will be publishing its decision in the test case in the CFC & Dividend GLO (Prudential Assurance Company Ltd v HMRC) on Wednesday 25 July 2018. This case concerns the UK's historical tax treatment of overseas source dividends received from portfolio holdings (i.e. less than 10 percent shareholding). This case has been running in parallel to the FII GLO which concerns the tax treatment of dividends received from group subsidiaries resident in other EU Member States and therefore there is some overlap in the issues. The final decision in Prudential may therefore provide an indication as to how things will ultimately play out for those taxpayers with unresolved FII-based claims for historical periods. As a reminder, the FII GLO has an application for permission to appeal to the UKSC currently pending. There is no update yet from the UKSC on whether the test claimants in the FII GLO have been granted permission to appeal. We anticipate this will be considered in light of the result in Prudential.
As reported earlier this month (click here), the MLI will enter into force for the UK from 1 October 2018. In advance of this, HMRC have now published the final list of reservations and notifications, along with a comparison against the provisional list provided at the time of signature of the MLI. Among the more significant changes, the UK-Germany treaty will no longer be a Covered Tax Agreement, whereas the UK-UAE treaty will be. It should be noted that the date which each individual UK tax treaty is overridden by the MLI depends on, among other things, the date the treaty partner deposits its own instruments of ratification, acceptance or approval. Once available, these details (along with the modifications themselves) will be published on the relevant country's tax treaties page on the HMRC website.
On 19 July HMRC published further draft legislation for Finance Bill 2018/19 which corrects previous, apparently unintended, omissions in the legislation that enables HMRC to charge interest for late payment of taxes and to pay interest on repayments to taxpayers. The draft clause retrospectively removes the need for an Appointed Day Order and also sets interest rates where this has not been done previously, most notably for Diverted Profits Tax.
The Chancellor has requested a further Office of Tax Simplification (OTS) review of the business lifecycle. The review will focus on issues affecting small businesses. A separate scoping document is expected in due course.
The OECD has released a revised draft toolkit for developing countries on the taxation of offshore indirect transfers of assets. Comments are requested on the draft toolkit by 24 September 2018.
On 20 July the OTS published a paper which looks at gig economy workers who operate through online platforms, how they pay tax and how this could be simplified.
Responding to the Government’s Brexit White Paper, James Stewart Head of Brexit at KPMG UK commented that the majority of businesses will welcome the recent White Paper which provides some much sought after clarity even if the document may not offer certainty on the final deal.
According to Venture Pulse Q2 2018 a quarterly report on global trends published today by KPMG Enterprise, Venture Capital (VC) investment in the UK gained strength in Q2’18, propelling it back to the top of the VC market in Europe.