The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
DAC 6 is the name given to an EU Directive that requires member states to enact rules designed to provide tax authorities with more information about direct tax planning arrangements.
Intermediaries, and in some cases taxpayers, must report information about cross-border arrangements that contain certain characteristics, or ‘hallmarks’. For this purpose, the term ‘cross-border’ involves more than one member state, or a member state and a third (non-EU) country. The overall aim is to provide tax authorities with more information about direct tax planning arrangements, although some of the hallmarks are widely drafted such that certain arrangements without a tax avoidance motive may also be caught.
The UK regulations that implemented the provisions of the Directive (sometimes referred to as the ‘disclosable arrangements’ rules in the UK) came into force on 1 July 2020. This date fell within the implementation period (IP), when the UK was still treated for many purposes as if it were an EU member state. HMRC produced detailed guidance at IEIM600000 onwards.
However, the UK Government issued amendment regulations, which took effect on IP completion day (31 December 2020) to significantly reduce the scope of the UK regime. All the hallmarks were removed, other than those in Category D. The EU-UK Trade and Cooperation Agreement (TCA) requires the UK to abide by OECD rules on exchange of information on cross-border arrangements. The category D hallmarks have been retained, as this enables the UK to comply with the OECD Mandatory Disclosure Rules (MDR).
Further changes are expected, as HMRC intends to completely repeal the DAC 6 legislation and replace it with new legislation to implement the OECD
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are
Expenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and exclusively test. See the Wholly and
Employee benefit trusts (EBTs) are commonly used to support employees’ share schemes and to provide other benefits to employees in the form of pensions and bonuses.Their use has been significantly affected by the introduction of the disguised remuneration rules. Although the statutory exclusions
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.