We highlight the following changes proposed in the Finance Bill 2013 relevant to cross border movements:
- When a UK resident company transfers its place of effective management to another member state, exit charges can be deferred. Two options will be introduced: staged payments of six annual installments; or allocating the exit charge on an asset by asset basis, with tax payable once the asset has been realised. Deferred tax payments will be subject to interest.
- Companies resident in the EEA with loss-making
- UK permanent establishments (“PE”) will have fewer restrictions on when losses can be surrendered from their UK PE. From 1 April 2013, a new restriction will apply for EEA resident companies based on whether their losses are relieved in another country in any period, rather than on whether they could potentially be relieved in another country.
- The new Controlled Foreign Companies (“CFC”) rules will apply from 1 January 2013. Further
- amendments have been proposed to remove specific CT avoidance schemes: the scope of the rules have been extended to include profits from hire purchase and similar contracts, and a limit to the amount of double taxation relief that can be claimed by UK companies that form part of certain arrangements involving the routing of a loan from one CFC to another CFC through one or more UK companies.
- The Government will introduce a General Anti-Abuse Rule (“GAAR”) for arrangements entered into after the Finance Bill receives Royal Ascent. The legislative framework of the GAAR is as previously announced under the consultation but now also includes details on procedural arrangements. The GAAR will apply to income tax, CT, CGT, inheritance tax, petroleum revenue tax and SDLT. Separate legislation will be introduced to bring NIC within the remit of the GAAR.