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Exchange of Information – New HMRC guidance published

Exchange of Information – New HMRC guidance published

This article focusses on the new exchange of information rules and newly published HMRC guidance.


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HMRC have published new guidance on exchange of information (IEIM500000) rules which took effect from April 2016. The guidance sets out the information to be exchanged (and exclusions, such as commercial secrets) and notes that ‘rulings’, for these purposes, may include views given by HMRC as to the likely tax treatment of a transaction as part of ‘real time working’.

Automatic exchange of certain new rulings began in April 2016, with increased exchange from 1 January 2017 following changes to EU law and international best practice during 2015. HMRC will also exchange past rulings and APAs, in some cases back to those made in January 2010.

There are two definitions of rulings for the purposes of automatic exchange - one agreed by the OECD and the other by the EU. Both the definitions are based on the same concept: that of a specific taxpayer (or group of taxpayers) being entitled to rely on the advice, information or undertaking provided by a tax authority concerning their tax situation. The term ruling relies on the concept of legitimate expectation. Broadly speaking, this is where a company is in a position to establish that they have a legitimate expectation that they can rely on what HMRC have said, then we can assume that this would constitute a ruling.

The guidance also provides a list of situations where their view will definitely be binding. These include:

  • All statutory clearances;
  • All non-statutory clearances;
  • All bilateral Advance Pricing Agreements (APAs); and
  • All unilateral APAs and Advance Thin Capitalisation Agreements (ATCAs).

However, these are only examples which would definitely constitute a ruling. The form a ruling can take is not specified. It could be given in writing in a letter or email, or verbally at a meeting or over the phone.

The guidance also states that where there are insufficient facts for any opinion or agreement to be given, or where their response is not specific to the customer, no legitimate expectation is provided and therefore this would not constitute a ruling. The guidance specifically highlights that the following situations will not be rulings:

  • The taxpayer has not described all of the relevant facts to HMRC and the taxpayer is told that assurance cannot be given as HMRC do not have sufficient detail;
  • HMRC refer the taxpayer to published guidance and does not tailor their advice to the specific situation of the taxpayer.

Where HMRC refuse to provide a ruling, there is nothing on which the taxpayer is entitled to rely and therefore there is no requirement to exchange details.

Where groups are looking to obtain input from HMRC on a transaction, it will be necessary to carefully consider what information is provided to HMRC and whether HMRC’s response could constitute a ruling to ensure groups do not inadvertently obtain a ruling without meaning to.


For further information please contact :

John Addison

Sheree Vivers

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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