Industry secures key revisions to new tax legislation
Suzanne Lovell
According to today's Property Week article the property industry has welcomed revisions in this week’s Finance Bill to legislation on tax relief for interest costs that help to address potentially damaging and unintended consequences for property developers and investors.
It read: "As part of a wider package of measures to tackle tax avoidance that come into force next month, the government is restricting the tax deductibility of interest payments.
The property industry had feared it would be unfairly hit by the rules, which were designed to stop companies from artificially moving profits between different countries to lower their tax obligations. The original proposals would have left investors and developers that rely on debt finance facing significantly higher tax bills.
However, these fears have largely been allayed thanks to amendments made by the government.
Exemptions
This week, the Finance Bill contained important revisions related to a key concession won earlier this year in the form of the Public Benefit Infrastructure Exemption, which exempted property let to third parties from the new rules, subject to certain conditions.
The British Property Federation had warned that £20bn of development finance would be at risk as a result of a condition of the exemption that parent company guarantees - which are frequently required by lenders for development projects - should not be used.
Read the full article here.