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Finance Bill 2017-2019: Real estate impact

The June general election meant that a number of key tax measures were removed from the first 2017 Finance Bill. Finance (No. 2) Bill, published today, re-introduced these, including the reform of corporate tax loss relief restrictions on the corporate interest deductibility, changes to the Substantial Shareholdings Exemption (“SSE” and bringing UK residential property within the scope of UK IHT for non-domiciliaries.

Corporate interest rules - unexpected consequences

The new corporate interest restriction rules have now been in force for over a year. Our experience of the rules to date has taught us that the rules sometimes bite in unexpected ways, resulting in increased interest disallowance going forward, or the loss of tax attributes such as surplus interest allowances. It is particularly important that advice is taken on the impact of the rules when contemplating a transaction (e.g. purchase or sale of a company / companies or a business), refinancing or internal reorganisation of a group.