Following extensive consultation the Government announced in the 2008 Pre-Budget Report a package of measures to reform the taxation of foreign profits which were intended to enhance the competitiveness of the UK and make it a more attractive location for multinational businesses. Legislation was included in Finance Act 2009. The measures introduced include:
• 100 percent exemption from corporation tax for most dividends received effective from 1 July 2009;
• Restrictions on interest deductibility (a worldwide debt cap restricting the deduction of interest) for accounting periods beginning on or after 1 January 2010;
• Abolition of certain CFC exemptions; and
• Replacement of the old Treasury consent rules with a new reporting requirement that applies to transactions with a value of £100 million or more.