The reform document follows the EU Commission's commencement of infraction proceedings into the two regimes which took the form of a reasoned opinion issued on 16 February 2011.
In essence the concept of taxing a UK person either where they are a participator in a non-UK closely held company which realises a gain or where income is payable to a person abroad as a result of a transfer of assets is a breach of the freedom of establishment. The rules must therefore be more targeted.
Whilst there are some differences much of the document mirrors HMRC's response to the challenge laid down to the legitimacy of the UK's controlled foreign companies (CFC) rules by Cadbury Schweppes plc v IRC (C-196/04) which was...
