Revenue plans to avoid tax duplication
The paymaster general has announced legislation in next year's Finance Bill that will ensure profits are not taxed twice after a change in tax law.
Observers believe Primarolo has moved to introduce the new legislation because of a concern that current law is not coping with changes in accounting rules.
The statement issued by the Inland Revenue offers assurance that in the event of changes profits will not be taxed twice nor ‘omitted from charge’.
It will also ensure relief is provided only once for trading expenses.
Primarolo is also proposing that tax on the increase in value of assets following changes in accounting rules could be spread over six years instead of being paid in full on disposal.
For more information see the release from the Inland Revenue.