Budget analysis – International corporate taxation

Speed Read: The CFC reform is running to plan and will be co-ordinated with the foreign branch profits review and UK Patent Box consultation. New legislation will clarify that most distributions can benefit from the distribution exemption as originally intended while the consortium rules are eased to allow EU/EEA link companies. Minor changes mitigate the application of the debt cap to certain common commercial arrangements. Losses from artificial hedging arrangements are restricted with further consultation on financial products avoidance around asymmetric treatment of transactions. Regulations will deal as and when with the IASB's ongoing review of the treatment of financial instruments. New double tax relief anti-avoidance rules will block financial traders' schemes to manipulate expense relief and manufactured overseas dividends.