Last year the Office of Tax Simplification (OTS) proposed that Capital Gains Tax (CGT) rates should mirror Income Tax rates which would have seen the top rate of CGT rise to 45% from 28%, in order to help ‘close the gap’ on the financial burden which has arisen due a direct result of the COVID 19 pandemic.
Indirect Tax changes can help revitalise the tourism and hospitality sector
Given the close proximity and strong business ties with the UK, Denmark is an attractive location for UK companies to operate in. But what some companies may be unaware of is that, when undertaking work in Denmark, whether this be offshore or onshore, the UK company and its employees may have resultant Danish tax liabilities.
The Office of Tax Simplification ‘OTS’ published a document in June 2021 setting out its intention to review the benefits, costs and wider implications of changing the end of the tax year to either 31 March or 31 December. The UK tax year currently runs to 5th April each year.
A Company Share Buyback (or “Company Purchase of Own Shares”) is a common mechanism for shareholders to dispose of their shareholdings in private limited companies; typically to facilitate a shareholder exit without the other shareholders having to personally finance the purchase of shares or bring in a third party. In most cases, the company purchases the shares from the original shareholder and the shares are cancelled.
Section 18A of the Corporation Tax Act 2009 states that a UK resident company is entitled to make a Foreign Branch Exemption Election (“FBEE”). If a FBEE is made adjustments are required to be made in the calculation of the company’s total taxable profits. This means that any accounting profits or losses that arise in a foreign permanent establishment (“PE”) will not be included in the profits/losses chargeable to UK Corporate Income Tax (“CIT”).