Autumn Budget 2017—International

Autumn Budget 2017—International

This analysis is part of the Lexis®PSL Tax team’s summary of the Autumn Budget 2017.  Some of the links require a LexisPSL subscription. If you are not a subscriber, you can take a free trial here.

UK implementation of the BEPS Multilateral Instrument

FB 2018 will amend TIOPA 2010, s 2 (which gives effectto double tax treaties in UK law) with the intention of making it wide enough to encompass the UK’s implementation of the BEPS Multilateral Instrument (MLI). The MLI is an instrument developed as part of the OECD’s BEPS project to enable countries to implement the BEPS measures that require changes to double tax treaties, without having to renegotiate each treaty individually. The UK is a signatory to the MLI but the MLI will not take effecthere unless the UK ratifies it under its own legislative procedures.

It is still unclear how, precisely, the UK will implement the MLI under domestic law (given that the MLI amends treaties that take effectin UK law under multiple statutory instruments). One possibility is a ‘super’ statutory instrument to amend all the others, but it is not obvious that TIOPA 2010 currently provides the necessary authority to do this. TIOPA 2010, ss 2 and 6 gives effectto arrangements (which normally means double tax treaties) that provide relief from certain specific taxes. The MLI does not fall comfortably within this description, particularly the MLI provisions dealing with dispute resolution.

The changes to TIOPA 2010, s 2 (and equivalent inheritance tax provisions) announced at Autumn Budget 2017 are intended to widen this provision so that it does provide the necessary authority to implement the MLI. The amendments will provide that the section extends to giving effectto arrangements that operate primarily to restrict relief provided for in existing arrangements and delegate specific functions to competent authorities.

The legislation will take effectfrom Royal Assent to FB 2018, which under

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