UK Budget Alert 2010
By Arun Birla, Jiten Tank and George Weston
On 24 March 2010, the UK Chancellor, Alistair Darling, announced the 2010 UK budget (the "Budget"). This summary sets out the key highlights.
No changes were announced to corporation tax rates.
The temporary extension of trading loss carry back from one year to three years for losses up to £50,000 continues until 23 November 2010.
Legislation is planned to be introduced in the next Finance Bill to clarify that distributions that are capital in nature received by UK companies will not be prevented from falling within the distribution exemption regime introduced last year.
The government intends to amend those aspects of the corporation tax consortium relief rules to allow EU and EEA-resident companies engaged in UK consortia to pass relief for the losses of those consortia to their UK-resident subsidiaries.
The corporation tax rules on loan relationships will be amended to deny a close company a deduction for the release or writing off of a loan to a participator in that company. This measure is intended to have effect for debt (or part debt) releases or write-offs on or after 24 March 2010.