Earlier in the year, we reported on HMRC's proposals to amend the income rules on interest - see http://taxdeductionsblog.ffw.com/2012/withholding-tax-on-interest-important-changes-proposed.
Earlier in the year, we reported on HMRC's proposals to amend the income rules on interest - see http://taxdeductionsblog.ffw.com/2012/withholding-tax-on-interest-important-changes-proposed. Yesterday, HMRC published its response document. Several proposals have been dropped and the key points are as follows:
Yearly interest - this concept will not be abolished;
Quoted Eurobonds - the quoted Eurobond exemption will not be removed for intra-group issues where the Eurobond is listed on a stock exchange where there is no substantial or regular trading in the bond;
Disguised interest - the Finance Bill 2013 will introduce an anti-avoidance rule aimed at charging to income tax a return produced for a person by arrangements that are economically equivalent to interest; and
Interest in kind - proposals to determine the value of interest paid in the form of goods and services will proceed so that interest is treated as the value of those goods or services e.g. the retail or market price.
HMRC's full response can be found here: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_032340
Yearly interest - this concept will not be abolished;
Quoted Eurobonds - the quoted Eurobond exemption will not be removed for intra-group issues where the Eurobond is listed on a stock exchange where there is no substantial or regular trading in the bond;
Disguised interest - the Finance Bill 2013 will introduce an anti-avoidance rule aimed at charging to income tax a return produced for a person by arrangements that are economically equivalent to interest; and
Interest in kind - proposals to determine the value of interest paid in the form of goods and services will proceed so that interest is treated as the value of those goods or services e.g. the retail or market price.
HMRC's full response can be found here: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_032340