New Corporation tax anti-avoidance measures
The Exchequer Secretary to the Treasury recently announced a number of legislative changes designed to tackle corporation tax avoidance.
Legislation is to be introduced as part of 2011 Finance Bill to counter financial products avoidance schemes involving group mismatches (group mismatch schemes). HMRC have published a technical note including draft legislation and an explanatory note.
Legislation is also to be introduced, effective from 6 December 2010, to target schemes which have attempted to circumvent section 418 and section 419 of the Corporation Tax Act 2009 (loan relationships involving connected debtor or creditor).
Derecognition of Loan Relationships and Derivative Contracts
Legislation is to be introduced as part of 2011 Finance Bill to counter corporation tax avoidance schemes involving derecognition of amounts taxable under the rules on loan relationships and derivative contracts. The legislation will be effective from 6 December 2010.