Diverted profits tax (DPT) meaning

In this issue: Taxes management and litigation Companies and corporation tax International Finance Devolution Energy and environment VAT Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Taxes management and litigation Court of Appeal dismisses DPT judicial review (R (oao Refinitiv Ltd and others) v HMRC) In R (oao Refinitiv Ltd), the Court of Appeal rejected the companies’ appeal against the Upper Tribunal’s (UT) refusal to permit their judicial review claim concerning diverted profits tax (DPT) charging notices. See News Analysis: Court of Appeal dismisses DPT judicial review (Refinitiv Ltd v HMRC). UT finds FTT made errors when setting aside HMRC best judgment assessment (HMRC v Sintra Global) In Sintra Global, the UT overturned the First-tier Tax Tribunal’s (FTT) decision insofar as it addressed a notice issued by HMRC to an individual, rendering him liable for payment of a civil evasion penalty levied...

Key business tax announcements include: draft laws to overhaul UK provisions on transfer pricing, permanent establishments and the diverted profits tax a consultation proposing to extend transfer pricing rules to medium-sized businesses and to impose fresh reporting obligations on multinational groups for cross-border related-party dealings plans to create a working group to streamline and enhance administration of the Corporate Interest Restriction the government’s reply to the consultation on modernising the stamp duty on shares regime, plus a further consultation on elements of the 1.5% higher rate charge on certain overseas transfers of UK securities a consultation exploring reforms to HMRC’s dispute resolution approach, and the government’s response on tackling non-compliance, both within the Tax Administration Framework Review changes aimed at narrowing the range of capital assets captured by the VAT Capital Goods Scheme a 12-month deferral of the move to mandatory payrolling of benefits in kind and expenses a consultation on merging the current UK remote gambling duties into a...

R (oao Refinitiv Ltd and others) v HMRC [2024] EWCA Civ 1412 Three claimant companies delivered services, including services in respect of software, new product and content development, and data hosting, to a Swiss-based group entity that centrally held valuable intellectual property (IP) assets. The DPT notices charged the companies to tax for the 2018 accounting period by reference to a 'relevant alternative provision' (RAP). That RAP employed a 'profit-split' methodology, effectively apportioning, for the 2018 accounting period, both the Swiss entity’s annual profits and the profits realised on the disposal of the relevant IP assets, by reference to the claimants’ respective contributions made through the provision of the services. The total DPT was in excess of £167m. The claimants contended that HMRC had acted inconsistently and, accordingly, that it had acted unlawfully in public law terms...

Stop Press : From accounting periods starting on or after 1 January 2026, the Diverted Profits Tax is superseded by the unassessed transfer pricing profits rules. This Practice Note, alongside Transactions in UK land—tax rules, examines the anti-avoidance provisions aimed at countering attempts to sidestep tax on income, profits or gains connected with arrangements concerning, or trades of dealing in, land. The main anti-avoidance measure seeks to treat gains of a capital character realised on the disposal of land as income, bringing them within income tax or corporation tax. Further detail appears in Practice Note: Transactions in UK land—tax rules. From 5 July 2016 these rules superseded and expanded the former transactions in land rules (for information on prior rules, see Practice Note: Real estate—anti-avoidance: disposals of land and taxing capital gains as income (pre 5 July 2016) [Archived])...

This Practice Note outlines key tax considerations for businesses in the life sciences industry, including pharmaceutical, medical technology and biotechnology companies. It examines, among other areas, corporation tax topics such as research and development (R&D) reliefs and the patent box, together with cross-border matters including transfer pricing and investment reliefs... Cross-border framework On 31 January 2020, the UK left EU membership and entered an implementation period during which the EU continued to treat it as a Member State for many purposes. This ended on 31 January 2020, after which EU law and the jurisdiction of the Court of Justice of the European Union largely ceased to apply to the UK. The trading relationship between the UK and the EU is thereafter governed by the EU-UK Trade and Cooperation Agreement... State aid Following the UK’s departure from the EU, the UK is no longer bound by EU State aid law, which requires the European Commission’s advance approval of State aid. A number of the regimes described below...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...