Reeves’ Tax Benefit Closure Threatens UK Investment Appeal

The UK’s closure of a tax benefit to fund a cost-of-living package is set to hurt investor confidence in expanding foreign operations, tax professionals say.

Dropping the so-called foreign branch tax regime will strip multinationals’ ability to offset early-year losses to reduce their UK tax bills, leading to businesses becoming wary of establishing overseas operations from the UK, the professionals said.

“The foreign branch election regime has been part of the fabric of the UK corporate tax system for decades, so it was a surprise to see this change announced, particularly as it was without consultation,” Amanda Tickel, head of ...