Controlled foreign companies, debt cap, insurance companies and oil tax: draft regulations

Andrew Goodall

HMRC and HM Treasury have invited comments on several sets of draft regulations relating to corporation tax

Controlled foreign companies

The Controlled Foreign Companies (Excluded Banking Business Profits) Regulations 2012 provide a capitalisation safe harbour in respect of banking CFCs within banking groups. The Insurance Companies and CFCs: Avoidance of Double Charge Regulations 2012 are intended to ensure that the new CFC regime interacts appropriately with existing rules for taxation of offshore funds held by life insurance companies, particularly TCGA 1992 s 212.

Comments are invited by 19 November.

Debt cap

The Tax Treatment of Financing Costs and Income (Correction of Mismatches: Partnerships and Pensions) Regulations 2012 amend TIOPA 2010 Part 7 to alter the calculation of the ‘available amount’ where there is a mismatch. The Tax Treatment of Financing Costs and Income (Excluded Schemes) Regulations 2012 specify certain types of scheme that are excluded from anti-avoidance provisions relating to schemes which ‘manipulate the provisions of TIOPA 2010 Part 7.

Comments are invited by 16 November.

Insurance companies and friendly societies

The Insurance Companies (Transitional Provisions) Regulations 2012 set out transitional arrangements for the new tax regime established by FA 2012 Parts 2 and 3. The Friendly Societies (Modifications of the Tax Acts) Regulations 2012 make provision for modifications to FA 2012 Part 2, which sets out new rules for taxation of life assurance business and other long term business carried on by friendly societies.

Comments are invited by 19 November.

Oil tax: field allowance

The Qualifying Oil Fields Order 2012 defines large deep water oil fields and large shallow water gas fields, and specifies that oil fields that satisfy either definition are ‘qualifying fields’ for the purposes of CTA 2010 Part 8 Chapter 7. Companies holding a licence to operate in qualifying fields are entitled to a field allowance, which reduces the extent to which their profits are subject to the supplementary charge.

Comments on the draft regulations and a draft explanatory memorandum are invited by 2 November.