New Rules for Corporate Distributions
16/09/2009
Changes were brought in from 1 July 2009 that impact upon the tax treatment of foreign distributions received by UK companies. The rules form part of a foreign profits package that was announced at the last budget back in April of which there were 4 elements covering distributions, interest payments, controlled foreign companies and treasury consent rules.
Most distributions will be exempt, provided that they fall into one of the numerous exempt categories and do not fall foul of the anti-avoidance provisions, which are geared towards manipulation of distributions by way of using tax avoidance schemes.
The new rules greatly simplify the tax treatment of dividends received from overseas subsidiaries and equity investments as complicated double taxation relief calculations will no longer have to be made.
If you have any queries concerning the above please contact Michelle Malone on 0161 493 1930.