Tax Matters Digest

Next, we take a look at the draft guidance issued by HMRC to support the Advance Tax Certainty legislation included within Finance Bill 2025-26. The guidance sets out key procedural matters on the process and provides further information on the scope of clearances and the timing and information requirements around applying for clearance. Our article provides more information.

It will not be news that the COVID-19 pandemic fundamentally altered work patterns, with remote and hybrid working arrangements, often across geographic borders, now a permanent fixture in many organisations. This can raise tax issues, from tax and social security complexities to permanent establishment risks and transfer pricing concerns. During 2025, the OECD agreed to explore tax issues presented by the global mobility of individuals, with a view to ensuring that tax rules do not impede the opportunities that global mobility can present to businesses and employees, and to growth and investment more generally. A public consultation was launched on 26 November 2025 and our article sets out KPMG International’s response to the consultation, highlighting the challenges that businesses, individuals and tax professionals face as well as a series of recommendations and simplification requests.

We then move on to two personal tax related articles. The first discusses the Government’s pre-Christmas change to the Inheritance Tax reforms which were to limit relief for agricultural and business property to £1 million (APR and BPR respectively). The Government relaxed the reforms so that now £2.5 million of property can qualify for 100 percent relief. This follows on from the Autumn Budget 2025 announcement that individuals can transfer unused 100 percent relief allowances to a surviving spouse or civil partner, but other core changes to the APR and BPR remain in place. Our article summarises the issues that individuals need to consider before the rules come into force in April 2026.

Our second article addresses tax issues that should be considered when individuals spend more time in the US or are relocating to the US. This article highlights some of the common questions that should be asked and how actions can help manage some of the pitfalls and global tax costs.

We then provide two case updates. The first is the judgment from the Court of Appeal in The Tower One St George Wharf Ltd v HMRC which found that the SDLT general anti-avoidance rule applied to a series of intra-group land transactions. The case is of considerable interest because it sheds light on the meaning of key terms in the general anti-avoidance rule, the extent to which deeming provisions can be applied, using the ’mischief rule’ for interpreting anti-avoidance legislation purposively, and when drafting errors can be corrected by the courts.

The second case involves a First-tier Tribunal decision to reject an appeal by the taxpayer in M&C Educational Training Services Ltd (M&C) v HMRC. Our article provides a summary of the case and highlights the need for an R&D tax relief claimant to seek to advance a recognised field of science or technology.

We have a lot of updates in Other News In Brief in this Edition. We start with the progress of Finance Bill 2025-26 and the date of the ‘Spring Forecast’ (spoiler alert it is 3 March 2026!). Then we move on to HMRC’s International Manual which has been updated for the anticipated Finance Bill changes to the UK transfer pricing, permanent establishment (PE) and Diverted Profits Tax (DPT) rules and new guidance from HMRC in their Guidelines for Compliance (GfC) series which provides help aimed at multinational enterprises assessing the impact of the ‘imported mismatch’ rules. Sticking with HMRC’s GfC series we also flag changes that have been made to GFC7 on ‘common risks in transfer pricing approaches’. We also highlight an HMRC survey on the Business Risk Review Process, HMRC’s annual report on the banking Code of Practice, draft regulations for amendments to be made to the Construction Industry Scheme, and an updated OECD FAQ document in relation to the Crypto-Asset Reporting Framework and the Common Reporting Standard. Finally, we provide a link to KPMG UK’s December 2025 European Economic Outlook.

And just in case all of that doesn’t exhaust you, we also include one Indirect Tax Weekly Talking Points and Week in Tax summaries covering key tax developments from around the world.

With Storm Goretti arriving just as this edition lands in your Inbox, and with much of the UK sitting under blankets of snow, it may be a great opportunity to curl up with a cup of cocoa and catch up on all things tax.