Joint ventures can present difficult tax challenges at each stage of their lives. Contributions of assets to the joint venture are potentially costly, but merger relief can help to minimise corporate tax costs for capital assets and intangibles. Various ongoing tax issues arising as a result of the relationship between the joint venture and its shareholders should be addressed upfront, and the new hybrid mismatch rules and corporate interest restriction have been added to this list. Perhaps surprisingly, many joint ventures are unwound within a few years; good planning at the start can drastically improve the tax outcome on an exit.
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