UK: Restrictions on tax deductibility of corporate interest expense, consultation

UK: Restrictions on tax deductibility

A second consultation document on the UK’s implementation of the OECD’s recommendations relating to corporate interest expense deductibility under base erosion and profit shifting (BEPS) Action 4 was published on 12 May 2016.

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The UK government previously announced that new rules on interest deductibility will be introduced from April 2017 in line with the recommendations set out in the OECD report, and an initial consultation document was published in October 2015. The key policy design features for a restriction on the tax deductibility of corporate interest expense were included in the “Business Tax Roadmap” published alongside the UK budget 2016. This latest consultation seeks stakeholder input on the detailed design of the new rules to inform the drafting of the legislation for Finance Bill 2017.

The 92-page consultation document sets out further detail on the proposed design of the new rules together with 46 specific questions on which HM Treasury is seeking the views of stakeholders.

 

Read a May 2016 report prepared by the KPMG member firm in the UK: Consultation: Tax deductibility of corporate interest expense

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