The recently released draft corporate interest restriction rules are the UK’s response to Action 4 of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan, which made recommendations in relation to corporate interest deductibility. Generally, the rules follow best practice from the Action 4 report, but go further in some areas. The rules take effect from 1 April 2017 and could have a significant impact on the deductibility of finance costs of UK companies.

The UK has announced numerous other new corporation tax measures, including revised anti-hybrid rules, loss relief reform, tax strategy transparency and country-by-country reporting. Altogether, this means taxpayers are facing an unprecedented time of change and complexity.