As part of the consultation process (for the consultation on taxation of corporate debt and derivative contracts, which closed on 29 August), HMRC established four working groups of representatives from businesses, business advisers and others interested in the proposed reforms. Notes of the initial meetings of each of these groups have now been published.
Working Group 1 looked at unallowable purpose. According to Deloitte, ‘it seems that HMRC’s overall view is that the unallowable purpose rule generally works as intended, but there are certain areas where the rules are not as clear as they might be and this has led to a number of differences in interpretation’. Working Group 2 focused on the modernisation of the loan relationship and derivative contract rules as regards the connected party rules, group continuity treatment, partnerships and transparent entities and debt restructuring. Working Group 3 looked at hedge accounting and forex. Working Group 4 focused on proposals for changes to legislation in the ‘bond fund’ rules and ‘corporate streaming’ rules (in CTA 2009 Ch 3 Part 6 and the Authorised Investment Funds (Tax) Regulations, SI 2006/964, Part 4 Chapter 3, respectively).
As part of the consultation process (for the consultation on taxation of corporate debt and derivative contracts, which closed on 29 August), HMRC established four working groups of representatives from businesses, business advisers and others interested in the proposed reforms. Notes of the initial meetings of each of these groups have now been published.
Working Group 1 looked at unallowable purpose. According to Deloitte, ‘it seems that HMRC’s overall view is that the unallowable purpose rule generally works as intended, but there are certain areas where the rules are not as clear as they might be and this has led to a number of differences in interpretation’. Working Group 2 focused on the modernisation of the loan relationship and derivative contract rules as regards the connected party rules, group continuity treatment, partnerships and transparent entities and debt restructuring. Working Group 3 looked at hedge accounting and forex. Working Group 4 focused on proposals for changes to legislation in the ‘bond fund’ rules and ‘corporate streaming’ rules (in CTA 2009 Ch 3 Part 6 and the Authorised Investment Funds (Tax) Regulations, SI 2006/964, Part 4 Chapter 3, respectively).
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