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Pre-Budget Report 2008 - Taxation of foreign profits

A number of changes to the taxation of foreign profits have been proposed:-

  • an exemption for foreign dividends received by large and medium sized groups will be introduced in next year's Finance Bill;
  • the Government will consult on options to reform the UK's Controlled Foreign Companies (CFC) rules so that profits genuinely earned by overseas subsidiaries are not taxed in the UK; and
  • there will be a worldwide debt cap on interest, so that tax deductions for interest claimed by UK members of multinational groups will be restricted by reference to a group's consolidated net external finance costs.

Thanks to Sarah Withers for submitting this blog.

 

 

Date: 25th November, 2008
Author: Rachel Haddow

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