The Government announced new measures to prevent companies from obtaining a tax advantage by entering into contrived arrangements to convert brought forward losses into more versatile in-year deductions. These new measures will impact carried forward trading losses, non-trade loan relationship deficits and management expenses. These rules should not apply to commercial arrangements where the anticipated value of the economic benefits arising from the arrangements exceeds the anticipated tax advantage.
These new provisions could apply to a number of scenarios, including but not restricted to intra-group hedging and loan arrangements. If these rules are found to apply, relief will be denied for the losses in question.
The restriction will take effect from 18 March 2015 and will only apply to profits arising after this date.