In particular the proposed ‘gateway test’ is to be revised to include a more straightforward initial test to allow many groups to determine whether their subsidiaries are outside of the CFC rules and stop there without having to go through the detailed calculations a company which is likely to be a CFC would have to do. There is also a confirmation that the complexities of the excluded territories exemption and the scope of the many newly proposed anti-avoidance rules will be reconsidered.
Turning to some of the other areas dealt with in the update the government is planning to allow a full exemption for finance profits in some limited circumstances – broadly where loans are funded from ‘qualifying resources’...
