Sarah Howarth

It has been announced that for most UK resident companies, it will be mandatory for profits and losses attributable to a foreign permanent establishment (“branch”) to be exempt from UK tax. This will be effective for accounting periods beginning on or after 1 January 2027, with detailed guidance to follow shortly. Until now, such an exemption has been optional, and not taken up by many taxpayers.

Cross-border activity touches almost every part of your tax position: where you are liable to pay tax, how income and assets are treated across jurisdictions, whether you are entitled to relief, and whether the structure you are operating within today is still fit for purpose. Most finance directors and business owners only discover a gap in their international tax position when it has already become a liability. The right advice at the right time prevents that.

What is the impact on the balance sheet?