Tax regime on foreign subsidiaries will be easier on insurers
Chancellor Alistair Darling will rewrite UK insurance tax law in the coming budget to preserve London's dominance and stop companies quitting the UK, the Mail on Sunday reports.
Last week, the Association of British Insurers (ABI) produced a list of demands ahead of the Pre-Budget Report. The Mail says two of the ABI's major concerns - on the taxation of foreign profits - are likely to be met.
To stop multinational UK firms from diverting profits to low-tax jurisdictions abroad, the Treasury's treats with suspicion overseas units with large amounts of capital but few staff. Legitimate insurance subsidiaries are being caught in the tax net.
The Mail says: “By contrast, a British-owned manufacturing company would be allowed simply to pay the local tax and be exempt from UK taxes. The ABI wants this exemption to apply to insurers.”
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