Tax and the City briefing for November 2015

Consultation on a fixed ratio rule 

On 22 October the government issued a consultation paper on limiting interest deductions (www.bit.ly/1kvUMKR). This is in response to BEPS Action 4 on preventing base erosion through excessive interest. Although the government acknowledges that a statutory response is justified to the problems highlighted by Action 4 the precise scope of any new regime remains uncertain. If it included for example an appropriate threshold or was limited to multinational groups its impact could be much less extensive.

In its...