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Hybrids and other mismatches

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The CIOT has published its response to the draft legislation for Finance Bill 2021 on the hybrid and other mismatches regime for corporation tax.

Following up its previous response to the consultation on hybrid and other mismatches in 2020, the CIOT broadly welcomes the retrospective application of the proposed Finance Bill 2021 changes which will have effect from 1 January 2017 (when the original rules were introduced), but anticipates difficulties for companies which have had to take action based on the pre-amended version of the legislation. The CIOT therefore urges HMRC to introduce a simple mechanism to allow earlier years’ computations to be amended, particularly to help smaller UK companies refile and obtain any repayments.

Together with a number of further recommendations, the CIOT focuses on the proposed new 10% interest threshold for the purposes of determining whether or not investors are caught by the ‘acting together’ test, noting that the definition of ‘investor’ may need further clarity particularly alongside any anti-forestalling rules.

Issue: 1516
Categories: News