Policy paper

Profit fragmentation

This measure deals with avoidance schemes where UK traders and professionals avoid UK tax.

Documents

Draft legislation

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Explanatory note

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Details

From April 2019, this targeted legislation aims to prevent UK traders and professionals from avoiding UK tax by arranging for their UK-taxable business profits to accrue to entities resident in territories where significantly lower tax is paid than in the UK. The counteraction will be effected by adding those profits to the profits of the UK trade.

This measure will also introduce a duty to notify HMRC of relevant arrangements meeting certain criteria.

A consultation with a summary of responses about Tax avoidance involving profit fragmentation is also available.

Published 6 July 2018