The government has announced changes to the rules to clarify the tax treatment on transfers of assets to partnerships, with immediate effect, to make clear that partnerships will be treated as part of a group
The changes – which the Chancellor said at the Autumn Statement would be introduced to stop abuse of the intangible fixed assets regime - will ensure that partnerships cannot be used in arrangements that seek to obtain a tax relief for their corporate members in a way that is contrary to the intention of the regime.
In its Autumn Statement documents, the Treasury indicated that the government is aware of tax planning around the intangible fixed assets regime used to obtain more generous corporation tax relief than is intended by the legislation.
‘It will therefore amend the regime to stop arrangements that use partnerships to obtain relief that was not intended.
‘The government will also amend legislation to counter two types of avoidance involving capital allowances and leasing, which involve businesses artificially increasing the value of their capital allowances or lowering the amount of tax which they pay,’ the Treasury said.
The Treasury expects this will being £220m in tax by 2020-2021.
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