Advisers voice disguised interest fears
HMRC's 'principles-based' approach to taxable interest sparks concern from advisers
Plans to crackdown on companies disguising interest they receive as other
forms of income could have dire consequences for preference shares and
controlled foreign companies, advisers have warned.
Companies often plan around taxable interest, making it capital gains or
alternatively as exempt from corporationta tax. In December, HM Revenue &
Customs introduced a ‘principles-based’ approach which has sparked concern from
‘Defining the difference between interest income and equity income is very
difficult. The new approach needs to be tightened up to avoid such uncertainty,’
said Bill Dodwell, head of tax policy at Deloitte.
In a briefing note, PricewaterhouseCoopers said the approach would place too
much reliance on clearances from HMRC, rather than the ‘letter of the law’.
Read more at taxnews.pwc.com