Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

U.K.’s Proposed ‘Super Deduction’ Adds Tax Planning Complexity

March 4, 2021, 7:16 AM

The U.K.’s newly proposed 130% capital allowance for investments in plants and machinery could leave companies struggling to determine whether they’ll ultimately end up with a tax break.

The “super deduction,” unveiled Wednesday by U.K. Chancellor of the Exchequer Rishi Sunak as part of the spring 2021 budget, would allow companies over two years to reclaim tax expenses higher than the actual cost of their investment.

The government estimates the proposal would cost an estimated 29 billion pounds ($40.4 billion) and would give the U.K. the most generous tax incentive regime among the 37 members of the Organization for ...