HMRC has outlined its current thinking on options to change the UK tax treatment of leased plant and machinery to ensure the tax rules in this area remain fit for purpose after the adoption of IFRS 16. Michael Everett and Peter Casey (KPMG) consider the background and the various proposals.
What’s the background?
The new accounting standard IFRS 16 Leases will be effective from 1 January 2019 for many large UK companies which adopt International Financial Reporting Standards. For lessees the effect of this new accounting standard is that the concept of an ‘operating’ lease will no longer exist. Instead lessees will be required to record each contract defined as a lease under IFRS 16 as a financial liability and a right of use asset. (There are exceptions for leases of 12 months or less; and for low...
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HMRC has outlined its current thinking on options to change the UK tax treatment of leased plant and machinery to ensure the tax rules in this area remain fit for purpose after the adoption of IFRS 16. Michael Everett and Peter Casey (KPMG) consider the background and the various proposals.
What’s the background?
The new accounting standard IFRS 16 Leases will be effective from 1 January 2019 for many large UK companies which adopt International Financial Reporting Standards. For lessees the effect of this new accounting standard is that the concept of an ‘operating’ lease will no longer exist. Instead lessees will be required to record each contract defined as a lease under IFRS 16 as a financial liability and a right of use asset. (There are exceptions for leases of 12 months or less; and for low...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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