TAX NEWS - 2010

Dorsey London tax update - 2010 Emergency Budget of United Kingdom

2010 Emergency Budget   

The 2010 Emergency Budget was released today. There were several announcements of relevance to multinationals, although with little detail.


CFC and Foreign Branch Reform

The Government confirmed the previously announced consultation process into CFC reform will proceed. No substantive details of the reform were announced today.

The first stage will be consultation over the coming months, with interim legislation to be enacted in early 2011. The second stage is said to involve wider reform, and is intended to be legislated by early 2012.

Reforms were also announced in relation to the taxation of foreign branch profits, with consultation also occurring over the coming months. Legislation is expected in 2011.

We will provide further updates on the proposed CFC and foreign branch reform as details are released by HMRC.


Corporation Tax Reform

The Government announced broader reform of corporation tax, although provided limited detail. Consultation will commence shortly, with details of proposed reform to follow later in the year.


General Anti-Avoidance Provision

The Government also announced its intention to investigate whether a general anti-avoidance provision should be added to the UK tax landscape. This is said to form part of a more "strategic" approach by the UK tax authority in reducing tax avoidance.