Finance Bill (No.2) 2017 documents released

The Treasury has confirmed the details for the second, post-election, 2017 Finance Bill, which includes provisions for new non dom rules and restrictions on the amount of interest deductible for corporation tax, and purposes, among other updates

For a small number of clauses taking effect before the Bill is introduced, technical adjustments and additions to the previous legislation will be made to ensure that the clauses function as intended. The government has published updated draft clauses for these provisions. They include reforms to the tax treatment of certain types of carried-forward loss for corporation tax purposes.

This means that all clauses set out in the Finance Bill will take effect from April 2017.

There is also a clause introducing a restriction on the amount of interest and other financing amounts that a company may deduct in computing its profits for corporation tax purposes.

The Bill extends the substantial shareholding exemption so that companies owned by institutional investors will be exempt from corporation tax on disposals of their subsidiary companies without regard to whether the subsidiary is trading or non-trading.

The provisions include new rules for deeming individuals domiciled in the UK for tax purposes from April 2017. The effect is that certain non-domiciled individuals will be treated as if they were domiciled in the UK for the purposes of income tax and capital gains tax from the start of the 2017-18 tax year. There are two categories of individual who will be affected by this rule: those who are domiciled outside the UK and were born in the UK with a UK domicile of origin; and those who have been resident in the UK for at least 15 of the preceding 20 tax years.

The bill has an additional clause designed to ensure that individuals deemed domicile under the new deeming provisions will be subject to inheritance tax on their worldwide income and gains.

It is also updated to introduce a new charge on outstanding loans from disguised remuneration schemes, along with two minor technical changes to the hybrid and other mismatch rules to ensure that they operate as intended.

As well as these updates, to provide maximum certainty for taxpayers, the government has also provided a list of all provisions that will continue to apply from the start of the 2017 to 2018 tax year or other point before the introduction of the forthcoming finance bill.

Finance Bill (No.2) 2017 documents are here.

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