The 2001 Pre-Budget Report – changes to corporation tax

David Southern is a barrister in practice at 3 Temple Gardens Tax Chambers. The 5th edition of his Tolley’s Taxation of Corporate Debt, Foreign Exchange and Derivative Contracts (in conjunction with PricewaterhouseCoopers) was published this month. He can be contacted at 020 7353 7884, e-mail clerks@taxcounsel.co.uk

Corporation tax was originally conceived as a simple gloss on income and capital gains tax. It has more and more become a separate system of taxation, largely divorced from income and capital gains tax. This trend will be accelerated by the changes to Finance Act 2002 announced both in the Chancellor’s Pre-Budget Statement of 27 November 2001 and earlier. In particular the following changes are to be included in Finance Act 2002 (as well as the extensive changes to the loan relationships, foreign exchange and financial instruments rules announced on 26 July):