United Kingdom: Income Tax

HMRC has launched a consultation proposing fundamental reform to the UK's distribution framework, potentially one of the most consequential tax law consultations in decades. The proposals aim to modernize rules that have remained largely unchanged since 1965, addressing how payments from companies to shareholders are taxed and closing perceived loopholes that allow value extraction at capital gains rates rather than dividend rates. The consultation covers seven key areas including reductions of capital, dem

Individuals and unincorporated businesses pay capital gains tax (CGT) on any gain, whilst companies include the gain in their total taxable profit, taxed at the corporate rate.

HMRC has increasingly targeted employee share plans under disguised remuneration rules, challenging arrangements involving third-party participation even when no tax avoidance motive exists.