On 11 July 2023, the Finance (No. 2) Bill 2023, also known as the Spring Finance Bill 2023, received Royal Assent. The bill has now officially become the Finance (No. 2) Act 2023. Amongst other things, the Act includes extensive legislation for implementing the OECD Pillar 2 (global minimum 15% tax) framework in the UK, including both a multinational top-up tax and domestic top-up tax that will have effect for in-scope entities for accounting periods beginning on or after 31 December 2023. Other noteworthy aspects of the legislation (previously discussed here) include:
- Carried interest accruals basis: amendments to the UK chargeable gains legislation, to permit UK resident individuals to elect for their carried interest to be taxed in the UK on an accruals basis, thus facilitating double tax relief in relation to other taxing jurisdictions (particularly the US);
- Amendments to the Qualifying Asset Holding Company (QAHC) rules: targeted changes to the QAHC regime, aimed at rendering the regime more accessible to investment fund structures within its intended scope, including enabling investment fund structures that utilise aggregator, feeder and parallel partnerships to better access the regime, and enabling the rules to better achieve their intended effect; and
- Employee share incentives: changes to Enterprise Management Incentive scheme requirements, specifically in relation to restricted shares and working time declarations, and to the share value limit and share class requirements for Company Share Option Plans.
Please contact a member of the Weil London Tax team if you would like to discuss any aspects of the Finance (No. 2) Act 2023 in greater detail.