Michael Everett and Peter Casey (KPMG) give reactions to HMRC’s consultation on tax changes proposed in response to IFRS 16.
HMRC has laid out in its 1 December 2017 consultative document Leasing: tax response to accounting changes how it will change the long funding lease rules and the tax definitions of finance lease to cope with the new accounting standard IFRS 16 Leases (IFRS 16). HMRC has given details in the areas of long funding leases and transition; in other areas it has given indications of the changes that will be made and more detail is awaited.
Why are changes being made?
Under IFRS 16 the familiar distinction between a ‘finance lease’ and an ‘operating lease’ will cease to apply for lessees. As a result aspects of the tax rules will fail to apply as intended because they rely on the accounting classification. For example:
...
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Michael Everett and Peter Casey (KPMG) give reactions to HMRC’s consultation on tax changes proposed in response to IFRS 16.
HMRC has laid out in its 1 December 2017 consultative document Leasing: tax response to accounting changes how it will change the long funding lease rules and the tax definitions of finance lease to cope with the new accounting standard IFRS 16 Leases (IFRS 16). HMRC has given details in the areas of long funding leases and transition; in other areas it has given indications of the changes that will be made and more detail is awaited.
Why are changes being made?
Under IFRS 16 the familiar distinction between a ‘finance lease’ and an ‘operating lease’ will cease to apply for lessees. As a result aspects of the tax rules will fail to apply as intended because they rely on the accounting classification. For example:
...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
