The financial secretary to the Treasury, Stephen Timms, has announced Government proposals to introduce legislation in Finance Bill 2009 on two different tax issues.
The plans – revealed in a ministerial statement to Parliament earlier – are intended to address problems that have come to light as a result of recent turbulence in the financial markets.
They are:
- An amendment to paragraph 1(3) of Schedule 18 ICTA 1988, to ensure that preference shares that carry a right to dividend of a fixed amount or at a fixed percentage of the nominal value of the shares, but that give the issuer the right to pay a smaller dividend in certain circumstances are not disqualified from being treated in the same way as 'fixed rate preference shares' for the purposes of the tax group rules solely due to this feature.
- Amending the currency rules in sections 92 to 92E Finance Act 1993 so that companies having functional currencies other than sterling carry forward any unused losses to offset future profits in their functional currencies instead of sterling.