HMRC Consultation outcome: Corporate interest restriction - consultation on leases
Released 6 July 2018
HMRC have published responses to the consultation on three options for legislative changes to ensure the corporate interest restriction rules continue to work as intended.
On 1 December 2017, HMRC published a consultation on Corporate Interest Restriction: Tax response to accounting changes for leasing setting out three main options for legislative changes required to ensure the corporate interest restriction (CIR) rules in the Taxation (International and other Provisions) Act 2010, Pt. 10 continue to work as intended following the proposed repeal of Finance Act 2011, s. 53 and the introduction of the new lease accounting standard, International Financial Reporting Standard 16 (IFRS 16), with a mandatory implementation date of 1 January 2019. The government is publishing draft legislation that will require companies adopting IFRS 16 or the equivalent Financial Reporting Standard 101 under UK Generally Accepted Accounting Practice to continue to classify their leases as either ‘finance leases’ or ‘operating leases’ for the purposes of CIR. Legislation is to be included in the next Finance Bill, to be effective from 1 January 2019.