The Treasury took action last year to tackle the trend for US company to undertake inversions undertaken in order to shift the tax residence of a parent entity to a low-tax jurisdiction to avoid US taxes.  After this, the pace of transactions fell, although inversions have been back in the headlines recently as a result of Pfizer’s potential $150m deal to buy Dublin-based Allergan, which would see the US drug giant redomicile in Ireland.

Jacob Lew, US Treasury secretary, said: ‘This next action makes it even harder to invert, and further reduces the tax benefits for US companies. While we intend to take additional action in the coming months, there is only so much the Treasury department can do to prevent these tax-avoidance transactions.