It is proposed that a finance company partial exemption (FCPE) is applied to overseas financing that will usually tax a quarter of overseas intra-group finance income. The consultation document states that in most situations this will result in an effective UK corporate tax rate of 5.75% on profits from overseas intra-group finance income by the year 2014.
The ACT acknowledges that FCPE improves the competitiveness of UK corporate tax and has provided comment on specific proposals including the FCPE design options and the interaction of FCPE with treasury management activities.
