UK referred to European Court of Justice over tax

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The European Commission has referred the UK to the European Court of Justice over the taxation of capital gains and assets held abroad.

The Commission has referred the UK over legislation which allows it to tax UK-based parent companies for the capital gains made by subsidiaries in other member states, despite no tax levied on subsidiaries in the UK.

The Commission’s decision to refer the UK over income tax on income generated by companies in other member states, in which UK residents have invested in.

“The Commission is of the opinion that this restriction is disproportionate, in the sense that it goes beyond what is reasonably necessary in order to prevent abuse or tax avoidance,” the European Commission reports.