16 MARCH 2016
Addressing hybrid mismatches
From 1 January 2017 multinational enterprises will be prevented
from avoiding tax through the use of certain cross-border
business structures for finance transactions.
The operation of the patent box will be modified, with effect
from 1 July 2016, to comply with the OECD’s new rules. The lower
tax rate will be made dependent on, and proportional to, the
extent of R&D expenditure incurred by the company claiming the
The UK transfer pricing rules will be updated in line with the
revisions to the OECD Transfer Pricing Guidelines, so that
interpreting the application of the UK rules will be done by
reference to the revised Guidelines. The government will consult
on whether to introduce secondary adjustment rules into the
UK’s transfer pricing legislation to address the underlying cash
benefit from incorrect transfer pricing and encourage broader
compliance with the legislation.
Trading income received in non-monetary form
New legislation will ensure that trading receipts in non-monetary
form are brought into account for tax purposes at their full value.
As previously announced, the transactions in securities rules
will be amended and a targeted anti-avoidance rule will be
introduced to prevent income being converted to capital to gain
a tax advantage.
Asset managers’ performance-linked rewards
There will be new rules to determine when performance awards
received by asset managers may be taxed as capital gains. An
award will be subject to income tax unless the underlying fund
undertakes long term investment activity.
Your business might be
entitled to a valuable
R&D tax credit – even if
it doesn’t make a taxable
Check out the
position; you might be
surprised what can qualify
and how much it could be
worth to you.