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Finance (No 2) Bill 2023 published

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The Spring Finance Bill was published on 23 March 2023 and received its formal second reading in the House of Commons on Wednesday 29 March.

Running to 456 substantive pages the Bill brings together much of the draft legislation that was originally published on 20 July 2022 (‘Legislation Day’). The Bill also sets out new provisions not previously announced, including:

  • UK implementation of the BEPS GloBE Pillar Two rules;
  • pensions annual and lifetime allowance changes;
  • capital allowances 100% FYA (‘full expensing’) for companies;
  • R&D tax relief changes;
  • CGT disposals under unconditional contracts;
  • elective accruals basis for carried interest;
  • qualifying care relief increase;
  • amendments to the corporate interest restriction;
  • extended tax reliefs for the creative industries sector;
  • new investment zones;
  • enterprise management incentives changes;
  • introduction of the new electricity generator levy;
  • changes to the genuine diversity of ownership condition for the QAHCs, REITs and non-resident CGT rules; and 
  • changes to the transfer pricing documentation requirements applicable to large multinationals.

Budget Resolutions, which enable changes to be brought into force in the interim period before the bill is given Royal Assent, and the usual detailed explanatory notes, are also available from the UK ‘Bills Before Parliament’ web pages.

Pillar two

In a client briefing, EY notes that the provisions on the UK implementation of the Pillar Two rules build on the draft legislation published last July, in addition to providing some major key developments that are intended to reflect the OECD Administrative Guidance published on 2 February 2023. The firm highlights the following key technical developments include:

  • a mechanism to carry forward certain amounts to future periods;
  • changes to prevent certain credits arising from debt releases in corporate rescue scenarios from having an adverse impact on the GloBE calculations;
  • the exclusion of exchange gains or losses on hedging instruments from the GloBE calculations if an election is made and certain conditions are met;
  • the inclusion of temporary rules to allocate taxes arising from a blended controlled foreign corporation regime (such as US GILTI rules) to members; and
  • changes to the transitional provisions applying to assets transferred between two members after 30 November 2021 but before the GloBE rules apply. 

Issue: 1613
Categories: News
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