UK’s conservative party on July 8 unveiled its first budget of new the new term, proposing to reduce the 20 percent UK corporate income tax rate to 19 percent beginning April 2017 and to 18 percent beginning April 2020.
Companies with profit over £20 million a year would be required to pay each tax installment sooner, though.
The UK bank levy, a charge on banks’ global balance sheets, would be reduced gradually over the next six years and UK banks’ overseas subsidiaries would be exempt from the tax after 2021. The tax reduction would be offset by an 8 percent corporate tax surcharge on bank profits.
Corporate tax relief for companies that write off the cost of purchased goodwill would also be removed.
The budget documents also state that legislation will be introduced revising the tax treatment of transfers between related or connected parties of trading stock and of intangible fixed assets to ensure the correct valuation for computing profits when rules imposing market value and transfer pricing both apply.
Another measure would remove the ability of UK companies to reduce or eliminate a controlled foreign corporation (CFC) charge by offsetting UK losses and surplus expenses against that CFC charge.
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