• At-a-glance
• Administration Of Tax
• Personal Taxation
• Employment Taxation
• Business Tax
• Corporation Tax
• Capital Gains Tax
• Savings and Investments
  
• Trusts
  
• Anti-Avoidance
  
• Stamp Taxes
• Value Added Tax
• Insurance Premium Tax
• Environmental Taxes
• Excise Duties
• Miscellaneous

Anti-Avoidance

Corporation Tax Avoidance: Authorised Investment Funds

Legislation will be introduced, with effect from 22 June 2010, to ensure that a corporate investor cannot make use of an authorised investment fund to create a credit for UK tax where no UK tax has been paid. The corporation tax deduction given for interest distributions will be restricted so that the deduction is reduced to the extent that the distribution is derived from dividends that are exempt from corporation tax. Additionally, where foreign tax is suffered by an authorised investment fund, the deemed tax credit in the hands of the corporate investor will be treated as a foreign tax credit for all tax purposes (and a proportionate part of the income will be treated as foreign income).

Loan Relationships

The summer Finance Bill will include legislation intended to tackle avoidance schemes under which the profits arising to a company from a financial asset have been claimed to fall out of account for tax purposes as a result of the ‘derecognition’ of a loan or derivative. This will have effect for credits and debits arising on or after 22 June 2010. The legislation will extend the circumstances in which amounts are to be fully recognised for tax purposes, to include cases where derecognition arises as a result of the acquisition or variation of a capital interest in a company, partnership or trust, or where derecognition is triggered by an event that occurs in a later accounting period to that in which the derecognition takes place.