皇冠体育app

皇冠体育app Government has today announced that it is introducing new legislation, effective from today, to block a tax avoidance scheme involving Manufactured Overseas Dividends (MODs). 聽

皇冠体育app scheme could have resulted in companies, particularly in the financial sector, offsetting or claiming repayment of UK income tax that had in fact never been paid.聽 This could have led to a significant loss of tax receipts, had the Government not taken action.聽聽聽

皇冠体育app new legislation clarifies the corporation tax treatment of MODs.聽 It has been drawn up to counter the newly disclosed avoidance scheme, in which the recipient of a MOD claims to have received it under deduction of UK income tax and seeks to set this off against a corporation tax liability or have it repaid, despite no UK income tax having been paid.聽

皇冠体育app draft legislation, published today by HMRC, will put beyond doubt that no set-off or repayment of income tax can be made in such cases.

David Gauke, Exchequer Secretary to the Treasury, said:

It is essential that everyone pays the right amount of tax at the right time, in order to both provide funding for public services and maintain fairness for the taxpayer, and the Government is determined to reduce tax avoidance.

We have acted quickly to prevent the use of this particular scheme and we will not hesitate to close down other schemes representing a significant risk to the Exchequer as we become aware of them.

As this is an area where there is repeated avoidance, in addition to the new legislation, the Government will conduct a wider review of the tax rules on MODs, following Budget 2012, to simplify the rules and reduce further opportunities for avoidance.

Any changes made following the consultation would not come into effect before 1 April 2013.

Notes for Editors

1. MODs are payments made under an arrangement for the transfer of overseas shares.聽 Where dividends are paid on the shares, one party is required to pay to the other an amount that is representative of those dividends.

2. 皇冠体育app legislation will be in the 2012 Finance Bill. 皇冠体育app draft provision, together with an Explanatory Note and Tax Information and Impact Note, can be found on the .

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