The government published a consultation paper last week outlining its strategy for modernising ...
The government published a consultation paper last week outlining its strategy for modernising the corporate tax system. The paper includes a proposition for the exemption of capital gains arising on the disposal of companies' substantial shareholdings.
The Chancellor of the Exchequer Gordon Brown said: "In 1997, we started the process of reform of the corporate tax system. The consultation launched today focuses on the next stage of these reforms with a new relief for corporate capital gains to facilitate the process of restructuring and reinvestment, helping business to take advantage of emerging global opportunities."
Along with its approach on capital gains exemption for companies' substantial shareholdings, the consultation paper explains how a parallel exemption for dividends might work. On this latter point, however, the Government feels the current system based around a credit approach offers a better way forward.
Other key points in the paper reveal the Government has no plans to restrict interest deductibility as part of its proposed reform of company gains or the possible exemption for dividends.
The paper stresses that corporate taxation is a key element to maintaining the UK as an attractive location for business. The key principles for corporate tax reform are highlighted as business competitiveness and fairness.
For more information see www.inlandrevenue.gov.uk or www.inlandrevenue.gov.uk. To download the publication "Large Business Taxation: The Government's Strategy And Corporate Tax Reforms", click on the link marked 'consultation paper' that's provided here.
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