HMRC launches corporation tax consultations
Wednesday 8th June 2016

HMRC launches consultations on the tax deductibility of corporate interest expense, reform of the substantial shareholdings exemption and reform of corporation tax loss relief
 
HMRC have launched separate consultations on the tax deductibility of corporate interest expense, reform of the substantial shareholdings exemption and reform of CT loss relief.
 
The consultation on tax deductibility of corporate interest expense seeks views on the detailed policy design and implementation rules which could restrict the tax deductibility of the corporate interest expense of UK groups where the UK net interest expense exceeds £2million. The new rules will apply from 1 April 2017 and will replace the current worldwide debt cap regime. This consultation will run until 4 August 2016.
 
The consultation on the reform of the substantial shareholdings exemption seeks comments on a number of options designed to increase simplicity, coherence and international competitiveness. It appears likely that the exemption will be relaxed, with changes introduced no earlier than April 2017. This consultation will run until 18 August 2016.
 
The consultation on the reform of corporation tax loss relief examines how best to deliver the proposed reforms and how this will interact with other areas of the corporation tax system. The new rules will allow losses that arise from 1 April 2017 to be carried forward and offset against any taxable profits, subject to a £5million annual restriction for each group, above which only 50% of losses can be offset. The consultation will run until 18 August 2016.