Daily Archives: April 17, 2021

Prince William County residents have a lot of thoughts, and theyre not shy about sharing them.

This article was written by WTOPs news partner InsideNoVa.com and republished with permission. Sign up for InsideNoVa.coms free email subscription today.

Prince William County residents have a lot of thoughts, and theyre not shy about sharing them.

During a meeting Tuesday, 38 people spoke at a hearing before the Board of County Supervisors on the proposed budget and tax rates for fiscal 2022, which starts July 1.

County Executive Chris Martino has proposed a $1.35 billion spending plan, an increase of 5.4%, or $69.6 million, over the current years budget. The proposal comes with a $1.02 billion six-year Capital Improvement Program, with $224.8 million designated for the upcoming fiscal year.

The county is operating on a $1.29 billion budget for fiscal 2021, which ends June 30.

Of the speakers, 11 were in favor of the spending plan, 15 opposed it and 12 asked for a variety of changes.

The budget includes a 25-cent increase in the business tangible computer and peripheral tax, to $1.60 per $100 of value. The levy primarily applies to data centers.

Josh Levi, president of the Data Center Coalition, and Ross Snare, chief operating officer of the Prince William Chamber of Commerce, said the proposed increases in the taxes for data centers were coming quicker than originally planned and would create uncertainty in the market and hurt the countys ability to attract the centers.

The real estate rate would remain unchanged, but rising property values are expected to increase the average residential homeowners tax bill by $306. The rate is $1.125 per $100 of value. Residential real estate values have increased by an average of 7%, while commercial real estate values dropped an average of 4.5%.

The personal property tax, which primarily applies to vehicles, is proposed to remain at $3.70 per $100 of value.

Some highlighted initiatives in the budget are $9.9 million toward employees, primarily to provide a 3% performance-based pay raise and cover additional health care costs.

Before the hearings, Martino updated some changes to the proposal since it was first introduced as staff finalized numbers, found some savings and adjusted revenues. Among the revisions was $952,000 to increase positions in the Commonwealths Attorneys office and to create an environmental sustainability program.

Martinos original budget included funding for two additional staffers in the commonwealths attorneys office and a pledge to add two more each year for the next five years.

Judges, court clerks, public defenders and prosecutors came out at a March meeting to advocate for more positions to keep up with an increase in caseloads. The revised budget now funds seven positions in fiscal 2022 and a total of 24 positions through fiscal 2024.

Commonwealths Attorney Amy Ashworth has said that adding 12 attorneys, six administrative staff and five case managers would be needed to continue prosecuting misdemeanor domestic violence and drunken driving cases on top of felony and state-mandated cases.

Martino said Ashworth had agreed to phase in positions, and the new proposal would ensure domestic violence and drunken driving cases are prosecuted.

The sustainability program will help the county tackle its climate change goals.

In November, the board adopted the Metropolitan Washington Council of Governments interim climate mitigation goals, joining other Northern Virginia jurisdictions in aiming for a 50% reduction in greenhouse gas emissions by 2030 and 100% renewable electricity by the same year.

In the capital budget, much of the funding for fiscal 2022 is to start design on projects that will be completed in later years. For example, the proposals include $1.4 million to design a new fire station, probably in the Potomac District in the Prince William County Parkway corridor.

More than a dozen firefighters donned red shirts to ask for additional pay increases, saying their salaries were frozen at the start of the COVID-19 pandemic even though theyve been on the front lines. Two people advocated for similar increases in the police department.

Mitch Nason, president of the Prince William Professional Firefighters Association, supported funding for additional staff, but said the county still has more to do. There are several years of expansion still needed in order to make Prince William County a safe place.

Although the hearings did not include a discussed tax on plastic bags, which officials have said could be brought forward at another point this year, several people spoke against such a levy. The Virginia General Assembly approved legislation in 2020 allowing localities to impose a 5-cent tax on disposable plastic bags at grocery, convenience and drug stores, with some exceptions.

Finance Director Michelle Attreed has said revenue from the tax would probably start around $50,000 to $55,000 a year before increasing to about $90,000.

Some people spoke against the $3.6 million to mitigate costs of renaming U.S. 1 as Richmond Highway. The board voted last year to remove the name of Jefferson Davis, the president of the Confederacy during the Civil War.

Three people from Serving Our Neighbors, which assists homeless people in the Sudley area of western Prince William, requested county support for additional staff.

Before the hearings, about 40 people attended an Axe the Tax rally outside the building organized by county Republicans. Republican Supervisors Jeanine Lawson, Pete Candland and Yesli Vega attended the rally during the boards recess, although not all were present at once to ensure compliance with Virginia Freedom of Information Act rules on public meetings.

Candland railed against the tax increases, saying no matter what they ask for, its never enough and county spending is at unprecedented levels. Lawson said it doesnt end with tax increases, and Vega said, Its always easy to propose something when its not your money.

The board is expected to adopt the budget April 27.

Excerpt from:

Republicans host Axe the Tax rally before Prince William budget hearing - WTOP

Money-making opportunities are available in the stock market for prudent investors, and the great thing is that there aren't any barriers to investing in the stock market. Invest in growing companies, stick with them for many years, and as long as an asteroid doesn't strike the Earth, you should have a decent nest egg in a few years down the road.

Here are some ideas to get you started.

Image source: Getty Images.

Some investors might be wondering if now is the best time to invest, especially given the markets have risen sharply over the past year. I believe the best time to invest is when you have cash to spare. It doesn't matter whether the markets are soaring to new highs or falling due to the latest panic on Wall Street.

To illustrate why, check out this chart that shows the performance of $10,000 invested in the S&P 500 at the height of the dot-com bubble at the end of 1999.

Data by YCharts.

Even if you had invested at a time when stocks were the most "overvalued" and crashed two times in the following decade, you still would have earned an annualized return of 7.1% per year on your money. At that rate, your money doubles every 10 years.

You could have an even greater return by adding $500 every month to your holding. Following this plan would have grown the value of your investment to $470,000. That's an internal rate of return of 9.6%, which is close to the average annual return of the marketgoing back decades -- and that return was from a starting point that every expert would say was the worst time to start investing.

Simply put, you can't go wrong by investing in a low-cost index fund, such as the Vanguard S&P 500 ETF (NYSEMKT:VOO), and consistently adding money to it.

If you're looking to do some catching up on your retirement goals, adding a handful of growth stocks can help. One secular trend to consider investing behind is the growing appetite for fitness and active lifestyles.

The athletic wear industry has been a sweet spot in the broader retail market for many years,fueling the growth of Nike(NYSE:NKE) specifically. But my favorite stock in this arena is lululemon athletica (NASDAQ:LULU). With only $4.4 billion in annual revenue, Lululemon is like buying a smaller version of Nike. It has vast opportunities to expand globally. Revenue from outside North America makes up only 14% of the business and is growing more than twice the rate as the rest of the company.

Another fitness stock that is experiencing phenomenal growth is Peloton Interactive (NASDAQ:PTON), which is capitalizing on the demand for convenient fitness solutions at home. It ended the most recent quarter with 1.67 million Connected Fitness subscriptions. The company's exercise machines are pricey, but management believes it can convert millions of gym-goers over the long term. Investors agree, with the shares up nearly 370% since it went public in September 2019.

One top stock that could offer upside in both the near and long term is Walt Disney (NYSE:DIS). The share price rebounded 78% over the last year, purely due to the growth of Disney's streaming business. Disney+ reached nearly 95 million subscribers in its first full year on the market, with 1.1 billion households identifying as Disney fans.

However, Disney's entertainment empire, which also includes ESPN, ABC, consumer products, and theme parks, is only operating at half strength right now. Revenue from parks, experiences, and products fell 53% in the most recent quarter. This segment is important to Disney, bringing in a whopping $26 billion in revenuein fiscal 2019. Once the parks fully recover, Disney stock could deliver more gains for investors.

The consumer shift to e-commerce is a secular trend that has already led to big gains for investors in stocks like Shopifyand Etsy, but with e-commerce still accounting for less than 15% of retail spending domestically,leading e-commerce companies stand to deliver above-average growth for many years.

Investors can't go wrong with Amazon (NASDAQ:AMZN). The company built a powerful competitive advantage with fast shipping, excellent customer service, and a wide selection of goods. It now has more than 150 million Prime members and counting.Management believes the high engagement with Prime benefits in 2020, including free grocery delivery from Whole Foods and Prime Video, will have a lasting impact on the business.Amazon remains one of the best growth stocks to own, period.

Growing your money is not complicated like the experts make you think. It's as simple as sticking to a plan and ignoring short-term market volatility. That's all there is to it. Invest regularly in growing companies, or in an index fund, and you're on the way to financial freedom.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Where to Invest $5,000 Right Now - The Motley Fool

The Weatherford Democrat recently reached out to candidates running in contested races in the May 1 election.Featured below are candidates running for the Weatherford city council Place 4 Ben Steiner, Kevin Cleveland and Jeanette Langley.

Candidates were given a platform to provide information about themselves and answer questions regarding their priorities, challenges and why they are running for office. Each candidate's response is published in the order their name will appear on the ballot.

Name: Ben Steiner

Age: 30

Occupation: Manager Program Management, Hospital Operations

Education/experience: Master of Healthcare Administration, University of Houston Clear Lake; Bachelor of Science in Public Affairs, Indiana University

Family: Wife, Olivia; Dog, Duke

QUESTION: Why are you running for office?

ANSWER: The government is best which governs least. Henry David Thoreau

The above quote summarizes my position on why I am running for Place 4 on the Weatherford City Council.

Lets get back to the basics and enjoy what it means to be a Texan and an American.

Lets be the catalyst that makes the decisions that shape our communitys future with less tax, less regulation, and more freedom!

Q: What are the top issues facing the city and how do you hope to remedy them?

A: Infrastructure Change and growth is headed to Weatherford thats irrefutable. We should be driving funds towards long term, sustainable investments in our infrastructure that will continue to allow Weatherford to continue rapidly grow.

Buildings The city is currently designing a new public safety building that is estimated to cost $14.5M and be approximately 36,800 square feet in size. The building size is 145% larger than the existing and 545% larger than the building that was vacated in 1997. I would strongly urge public officials to build what is truly needed (not wanted); and have a plan for the will-be vacated building once this is built.

A project like this should warrant collaboration across all our tax districts that creates a true public safety building (police, fire, EMS, training programs, etc) allowing for a larger building to be erected, while taking advantage of cost saving opportunities as a result of economies of scale.

It would be great to see government entities consolidate and eliminate their ever expanding footprint allowing businesses to utilize the shrinking available real estate in the community.

Regulation/economic development The citys municipal code is over seven hundred pages in total and continues to handicap small businesses and property owners. Small businesses have to divert precious resources and money to be in compliance with city code, instead of investing those resources into their core business.

Property owners pay a hefty bill every year for the right to keep their hard-earned property; only to have city dictate what they can and cannot do on their own property.

The municipal code needs thoroughly audited; leaving only the pieces that are for the protection of the public health, safety and welfare of its citizens as intended; instead we have ordinances that directly conflict with state law.

Q: What are your top priorities if elected?

A: Property taxes Property taxes are skyrocketing and out of control. Our state leaders continue to do nothing but pass legislation riddled with loopholes, and our local tax districts take advantage of it every year ever wonder why residents can vote to create a tax district, but cannot vote to disband it?

The city has raised property taxes seven of the last eight years, resulting in a net increase of 45.23%. The citys budget has skyrocketed from $43,909,964 in FY2015-16 to $63,789,352 in FY2020-21; an increase of $20M in six years.

Theres little to no accountability or need for fiscal conservatism when our tax districts are given a blank check every year paid for by local residents. How many residents can say theyve enjoyed a 45.23% or greater increase in their salary?

Economic Development - Weatherford is primed for significant growth given the close proximity to the metroplex and the countless companies moving into the area. The city needs to be doing everything in its power to attract businesses, large and small, to our community. The city has already denied or revoted conditional use permits to prospective businesses; something that needs to end immediately.

Fiscal Accountability - The city continues to spend money on vanity projects that have cost taxpayers millions of dollars, including construction of the Heritage Park south lot (~$1M) in the middle of the COVID epidemic when many households were financially impacted.

Im not opposed to quality of life projects, but the funding needs to come from additional sales tax revenues or through the many grants available for these projects; not via increases in property taxes.

Term Limits While I greatly appreciate the service of the many members of our boards, I believe refreshing the boards with new-

Q: Any final thoughts on why residents should vote for you?

A: By checking the box next to my name, you are voting for lower taxes, fiscal responsibility, and sensible planning for Weatherfords social and economic future.

I bring a unique perspective to the city council as I have lived in several different areas across the Midwest and Texas, ranging from small towns to major cities.

My decision-making will be made using facts and figures, not based on feelings.

Every dollar spent and every decision made will be done so in the best interest of the community.

Name: Kevin Cleveland

Age: 45

Occupation: I am the owner of three companies. C&S Development Services is a commercial general contracting company that is registered and licensed in 7 states. Paradigm Plumbing is a new commercial plumbing company that specializes in ground up restaurants. Terra Firma Real Estate is a local real estate company that focuses on residential homes in Parker and surrounding counties.

Education/experience: I have been in a leadership role most of my life. Starting and maintaining several businesses has taught me to provide for personnel, balance budgets, needs, and growth while focusing on customer service. Specifically, my background in construction and development has given me a very wide view of how other cities in and around Texas are doing things. Weatherford is unique and should be kept that way. However, it never hurts to learn what is or is not working by watching others.

I currently hold:

- Texas Responsible Master Plumbing License

- Texas Real Estate Sales Agent License

- Private Pilot License

- Alabama Contractors License

- Arizona Contractors License

- Arkansas Contractors License

- Louisiana Contractors License

- New Mexico Contractors License

I have been part of:

- Weatherford Planning and Zoning Commission

- Weatherford Building and Standards (President)

- Weatherford Economic Development Board

- Weatherford City Council

- Weatherford Chamber of Commerce Leadership Program

- Weatherford Citizens Fire Academy

- Liaison for Weatherford Planning and Zoning Commission

- Liaison for Weatherford Historic Preservation Committee

Family: Asking about my family got me looking back at the last interview that you guys did. It also cost me a few hours. I got sidetracked looking at my timeline and photos of my family. It was five years ago, and my four kids had me and my wife Chelsea in running every direction. Fast forward to today, my family has grown and changed. My wife Chelsea still deserves recognition for being my partner that has walked beside me and being the rock that me and my kids all turn to. Three of our four kids have graduated high school and the last one is a senior at Weatherford. Our oldest Anthony is 24. He has brought us two great additions to our family. He and his wife Tori gifted us with our first granddaughter Ainsley about seven months ago. Anthony and Tori both work for Parker County Jail. They bought their first home here in Weatherford last year. Sydney our only daughter is now 20 and has her own apartment here in Weatherford. Our middle son Tristan turned 20 in January. Tristan is currently training with Nation Wide Aviation at Parker County Airport to become a commercial pilot. Andrew 17, will be graduating high school this year and plans to start his goal of becoming an accountant at Weatherford College. My family has changed a lot over the last five years. I am proud of them all. I look forward to what the next five years has in store.

QUESTION: Why are you running for office?

ANSWER: I am running for City Council to serve the community that has put their trust in me. I love this community and want to make sure it grows in a way that protects our heritage, rights, sense of community and future.

Q: What are the top issues facing the city and how do you hope to remedy them? What are your top priorities if elected?

A: Question 2 and 3 are similar so I will answer them together.

Keeping our identity

Protecting Downtown

Keeping infrastructure up with expansion without getting too far out financially

Maintaining a balance between service and property tax

Securing our resources for future generations

Preparing for the Unknowns

The above are issues that we face and will always face. The role of council is to create policies and hire a manager that will lead the community in a direction that reflects the citizens vision. This can only be accomplished by being connected to the community. I will always work hard to be accessible. I will hear the concerns of the community and will work to make sure we meet your goals, not mine.

Q: Any final thoughts on why residents should vote for you?

A: I am part of a team that is working extremely well for this community. This team is made up of thoughtful citizens, a qualified council, and professional staff. The proof that this team is succeeding is all around us. The last year has brought many unforeseen events that could have brought the unprepared on hard times. While areas all around Weatherford were struggling to keep water on during the freeze, we maintained water. When areas around us are concerned with availability of water, we have begun construction of a water reclamation pipeline that will increase our abundant water supply. While areas around us issue boil restrictions, we are adding infrastructure at our treatment plant to improve the quality of our safe water supply. While communities are defunding police, we are building a new police department. While government agencies are encouraging police departments to be better trained, in a state that has 1900 police agencies we already have 1 of only 172 accredited departments. While many tax entities raised tax rates last year, we lowered ours. This team that the citizens have put together is not just solving problems as they come. We are getting out in front of them. This team is no accident. I was elected by the people to be part of it. I have served the position well and will continue to give it my all.

Name: Jeanette Langley

Age: 46

Occupation: Housewife

Education: AAS Business Administration; Personnel Supervision Marketing Human Resources; Provisional Certificate for Preschool from AACS

Experience: Retail, banking, educator, bookkeeper, business owner

QUESTION: Why are you running for office?

ANSWER: I want to be more than just a voice. I want to be a vote. I care about the people of Weatherford.

I like the vision stated on the cities website; Inspire every person, family, and organization to reach their highest potential.

Q: What are the top issues facing the city and how do you hope to remedy them?

A: Im concerned about the number of people affected by the ever increasing taxes, the ordinances stripping us of our rights, and the never ending fees being imposed by the city.

Q: What are your top priorities if elected?

A:Property taxes are the number one issue and concern for many Weatherford residents. People are being taxed right out of their homes. I am not a politician. I will not pretend to understand how a government operates. I do know how a budget works and the importance of being fiscally responsible, I will work hard to be a vote for all citizens of Weatherford to ensure our constitution upholds its intention by protecting the minority including social class. Property tax was a means to provide revenue to the municipality and nothing more.

Q: Any final thoughts on why residents should vote for you?

A: Everything I have learned, experienced, or accomplished has been a tool to prepare me for this position. I am ready to be a vote for freedom. Someone said to me, Trust me its better to have a right than to ask permission. I believe the role of government is still, We the People.

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MEET THE CANDIDATES: Weatherford city council Place 4 | News | weatherforddemocrat.com - Weatherford Democrat

This summary was featured in Documenteds Early Arrival newsletter. You can subscribe to receive it in your inbox three times per week here.

President Joe Bidens aides are facing both internal and external pressure as they try to shelter thousands of unaccompanied migrant children, with more arriving every day. Three officials said Susan Rice, Bidens domestic policy adviser, has been hard on Health and Human Services staffers because she believes they are doing an unacceptably slow job of releasing children to sponsors. Shelter systems are overcrowded, forcing children to stay in packed border holding stations for far longer than is legally allowed. Its tense, said Mark Weber, an HHS spokesman. But its a healthy tension with high-powered folks aligned around the mission of making sure these kids are well-taken care of. Reuters

In other federal immigration news

Speaker Nancy Pelosi (D-Calif.) nudged Biden on Thursday to increase the amount of refugees being accepted into the U.S. She said the U.S. has a responsibility to welcome foreigners facing danger at home. We have a moral responsibility in the world as every other country does, too to receive refugees who have a well-founded fear of persecution or harm [if they] return to their own country, Pelosi told reporters at the Capitol. Back in February, Biden vowed to quickly enhance the badly damaged refugee resettlement program. The current refugee cap is at 15,000, the lowest its ever been since the Refugee Act in 1980. Biden promised to raise the number to 125,000 at the beginning of the fiscal year on Oct. 1. The Hill

House Republican leaders accused Vice President Kamala Harris of not being present in immigration issues, presenting the image of a milk carton with her face on it to allege shes missing at the border. Biden has placed Harris in charge of handling the border influx, and House GOP Whip Steve Scalise (La.) wanted to know why Harris wasnt personally visiting the area. If shes the vice president of the United States and the president put her in charge of this, Vice President Harris needs to go down to the border and see this for herself, he said. However Harris did hold a White House meeting regarding immigration and announced plans to visit Mexico and Guatemala. She also met with experts on why so many migrants are coming from El Salvador, Guatemala and Honduras. HuffPost

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Documented was founded with the goal of making sure the people affected by our stories were also the people reading them. Immigration reporting is often extractive and isnt produced or published with the main protagonists as the intended audience. Through our reporting and out outreach via WhatsApp, weve created award-winning journalism that is created with and for New Yorks immigrant communities. This work is not easy and it is not cheap. Consider becoming a member today to help fuel this work. By joining the Documented Community, you can not help only provide us with the financial freedom needed to fulfill our mission but also meet others who are passionate about immigration in the New York area. Become a member today.

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Pressure Increases as Migrant Shelters Become Overcrowded - Documented NY

This TAXguide written by Allan Cinnamon, Cintax Ltd, author of Practical International Tax Planning publisher by Croner-I and Tax Faculty volunteer, analyses the impact of Brexit on those main areas of UK corporate tax law that are derived from EU legislation enacted while the UK was a member of the European Union. This TAXguide written by Allan Cinnamon, Cintax Ltd, author of Practical International Tax Planning published by Croner-i, and Tax Faculty volunteer, analyses the impact of Brexit on those main areas of UK corporate tax law that are derived from EU legislation enacted while the UK was a member of the European Union. These laws have been effectively transposed into UK law and the body of law is known as Retained EU Law.

As well as discussing the UK implications of Brexit, the TAXguide necessarily also considers the corresponding situation in the jurisdictions of the EU member states.

This TAXguide originally appeared as an article in Issue 64 of Croner-is Tax Update on 10 March 2021 and is reproduced with the consent of the publishers.

The European Union (Withdrawal) Act 2018 converts the body of EU law existing at the end of the transition period into UK domestic law (Retained EU Law). This body of law includes those UK tax laws made for the purposes of implementing EU obligations (principally, freedom of establishment and, to a lesser extent, free movement of capital). While the UK was a member state, these obligations were fulfilled through UK transposition of Directives (such as the Parent Subsidiary Directive) and through direct tax laws (such as controlled foreign company rules and group relief for terminal losses of EEA subsidiaries).

By far the most relevant piece of legislation relating to the retention of EU tax laws and regulations is The Taxes (Amendments) (EU Exit) Regulations 2019 made on 26 March 2019 (The Regulations). While continuing the Retained EU Law concept, these Regulations make amendments to UK legislation in order to adjust it where necessary.

So far as the topics covered by this article are concerned, the only relevant amendments made by the Regulations are the amendments to s140A onwards, Taxation of Chargeable Gains Act 1992 (TCGA 1992) which transposed the EU Merger Directive into UK tax law. In short, the amendments retain the merger legislation by making it applicable to the UK as well as the member states (see Mergers and Reorganisations at paragraphs 22 and 23 below).

In continuing the Retained EU Law concept, no amendments have been made to legislation covering other areas such as CFCs, group relief, intra-group transfers of assets and exit taxes. This legislation therefore continues to apply to EU-related transactions.

So all in all, EU-inspired legislation, directives and regulations remain enshrined in UK tax law for now. But with two exceptions: s758, Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), which freed the 20% UK withholding tax on interest and royalties paid to an EU associated company, has been repealed as from 1 June 2021. The UK has also decided to opt out of most of the reportable hallmarks under the DAC6 reporting requirements.

It is possible that further amendments will be made to UK tax law in the future to reflect the fact that the UK is no longer bound by EU law. However, the commentary below is based on the existing UK laws and any changes announced to date.

It remains to be seen whether the EU Commission or the member states will amend their EU-derived tax laws to admit the UK into them now it is no longer a member state. A sample of four jurisdictions, namely Belgium, Germany, Italy and Netherlands, indicates that they have made no amendments so far to extend their EU-related corporate tax legislation to the UK. The fifth, Ireland, is the exception having extended its group relief treatment to Irish groups directly owned by a UK parent company (see paragraph 15).

This TAXguide analyses the corporate tax impact of Brexit on the typical cycle of outbound and inbound business operations within the UK and the EU as from 1 January 2021. It analyses them from the viewpoint of both the UK and the member states of the EU. The relevant transactions are considered in logical sequence, beginning with setting up a branch in an EU member state (see paragraph 1) and concluding with mergers and reorganisations involving an EU member state (see paragraph 23).

There is necessarily some repetition since each step in the business cycle is separately considered.

Since the branch is not a separate entity, there is no asset disposal for UK tax purposes. Even if an election has been made for the branch profits and gains to be exempt from UK tax, a gain is deferred until the branch has disposed of the asset (s18A(6), Corporation Tax Act 2009 (CTA 2009)).

The deferral does not arise from EU law and there are therefore no EU implications to the transaction.

In contrast, it is likely that a taxable gain on transfer of the assets will arise in a number of those EU jurisdictions where the UK branch profits are tax exempt. However, in this case the gain was deferrable following a number of ECJ cases on freedom of establishment principles including Commission v Portugal (Case C-38/10); Commission v Spain (Case C-64/11) and Commission v Denmark (Case C-261/11); as well as consequent EU-compliant legislation within the specific EU jurisdiction.

It is not yet known whether EU jurisdictions may continue to allow an EU companys asset transfers to its UK branch to be deferable now that the UK is no longer a member state.

It was arguable that a UK companys EEA branch terminal losses could offset its UK profits in cases where the UK company had elected for the foreign branch exemption and was therefore unable to offset foreign branch losses. This principle, following Marks & Spencer plc v C & E Commrs (Case C-309/06) was a upheld by the ECJ in the case of a Danish company's foreign branch, A/S Bevola & Jens W Trock ApS v Skatteministeriet (Ministry of Finance, Denmark) (Case C-650/16).

Now that the UK is no longer a member state, it seems unlikely that EU branch terminal losses incurred after 31 December 2020 could offset UK profits when a UK company has elected for the foreign branch exemption.

In the reverse situation, a claim to deduct post-Brexit UK branch terminal losses (in an EU jurisdiction where foreign branch profits are tax exempt) will be inapplicable now that the UK is no longer a member state.

It is not yet known whether EU jurisdictions may nevertheless allow UK branch terminal losses to be deductible from the domestic profits of a company in an EU member state.

The simplest process for an EU companys tax-neutral EU branch incorporation gain on transfer of its assets to an EU company is under s140, TCGA 1992.

However, assuming that reliance on the Merger Directive is preferable, a UK companys incorporation gains arising on transfer of its assets to an EU company may still be mitigated under s140C, which transposes Art 10.2 of the Merger Directive.

The Regulations have now amended s140C so that it refers to a UK companys transfer of assets to a company resident in a (rather than another) member state. The transferee EU company will continue to be in that category and so s140C will continue to apply.

As far as mitigation in the EU branchs jurisdiction is concerned, it is not yet known whether EU jurisdictions will reciprocally amend their equivalent transposition of the Merger Directive to include the UK now that it is no longer a member state.

A number of EU jurisdictions already permit a tax-deferred branch incorporation outside the ambit of the Merger Directive. Examples are Belgium, Germany, Ireland, Italy, Spain and Netherlands.

Article 6 of the Merger Directive provides that, in a merger between EU companies (which includes a branch incorporation), the foreign branch losses should be carried over to the transferee company on incorporation, provided a carry over would apply in a merger between two companies in the same jurisdiction where the EU branch is located. Should the specific EU jurisdiction provide for the carryover of losses through the ambit of the Directive (rather than in some other way), the loss carryover will no longer apply when a UK company incorporates its EU branch in that jurisdiction.

It is not yet known whether EU member states may reciprocally amend their loss carryover rules to include the UK as a non-member state.

Loss carryovers apply, for example, in Belgium, France, Ireland, Italy, Luxembourg, Netherlands, Poland, Spain and Sweden.

Section 171, TCGA 1992 provides the simplest deferral process for an EU companys tax-neutral UK branch incorporation gains on transfer of its branch assets to a UK company.

However, assuming that reliance on the Merger Directive is preferable, an EU companys incorporation gains arising on transfer of its branch assets to a UK company may be mitigated under s140A, which transposes Art 10.2 of the Merger Directive.

Again, the Regulations have been amended so that s140A now refers to transferors and transferees resident in a member state or the UK (rather than a member state as previously).

Section 140A therefore continues to apply to an EU companys transfer of its UK branch assets to a UK company.

On incorporation, a UK branchs accumulated losses carry over to the UK company under s944A, Corporation Tax Act 2020 (CTA 2010), section 944A, irrespective of whether the transferor company is resident in an EU member state.

This facility will therefore continue to the benefit of an EU company that incorporates its loss-making UK branches.

As far as the EU companys jurisdiction is concerned, it is not yet known whether EU jurisdictions may reciprocally amend their equivalent transposition of the Merger Directive to include a UK branch incorporation now that the UK is no longer a member state.

Having said that, many EU jurisdictions allow for tax-neutral incorporation of all foreign (including UK) branches outside the ambit of the Merger Directive, or through a foreign branch exemption or a tax treaty.

There has been no change to the group relief rules. Following Marks & Spencer plc v Halsey (C-446/03), the EU subsidiarys terminal losses will continue to qualify for UK group relief under Ch 3, Pt 5, CTA 2010.

In the reverse situation when the UK is no longer a member state, a claim to deduct terminal losses of a UK subsidiary following the ECJ decision in Marks & Spencer is likely to be inapplicable. Most EU jurisdictions follow the judgement in restricting the loss relief to EEA subsidiaries.

It is not yet known whether EU jurisdictions may reciprocally amend their laws so that a UK subsidiarys terminal losses continue to be deductible in a consolidated return, fiscal unity, group relief claim or profit and loss transfer agreement.

Following National Grid Indus BV (Case C-371/10), Sch 3ZB, Taxes Management Act 1970 (TMA 1970) complies with the Anti Tax Avoidance Directive (ATAD) requirements for removal of a UK companys residence to an EEA state. Tax arising on deemed exit disposals is deferred with interest over a period of no later than five years and nine months from the end of the accounting period in which the exit occurs.

There has been no change to these rules so that the deferral option will continue to apply when a UK company migrates its residence to an EU member state.

In the reverse situation when the UK is no longer a member state, deferral of tax is likely to be inapplicable. ATAD requires EU jurisdictions to defer the tax arising only when residence is migrated to an EEA jurisdiction.

It is not yet known whether EU jurisdictions may reciprocally amend their laws so that tax deferral applies when residence is migrated to the UK.

In compliance with the Interest and Royalties Directive, freedom from withholding tax on the EU subsidiarys payment of interest to the UK company will no longer apply since the UK is no longer a member state.

It appears unlikely that EU jurisdictions will amend their laws to continue freedom from withholding tax under the Directive in view of the UKs repeal (see paragraph 12).

In the absence of any change, the downloadable Table indicates EU states rates of interest withholding tax under the UKs treaties with all 27 EU member states. Most rates are zero but there are some exceptions marked in bold.

Section 758, ITTOIA 2005, which freed the 20% UK withholding tax on interest paid to an EU associated company, is repealed as from 1 June 2021.

As a result of the repeal of s758, it will be necessary for EU lenders to rely on the relevant treaty with the UK for reduction of withholding tax on the interest received.

Under the Interest and Royalties Directive, freedom from withholding on the royalties paid to the UK company will no longer apply since the UK is no longer a member state.

It appears unlikely that EU jurisdictions will amend their laws to continue freedom from withholding tax under the Directive in view of the UKs repeal (see paragraph 14).

In the absence of any change, the Table indicates EU member states rates of royalty withholding tax under the UKs treaties with all 27 EU member states. Most rates are zero but there are some exceptions marked in bold.

Section 758, ITTOIA 2005, which freed the 20% withholding tax on royalties paid to an EU associated company has been repealed as from 1 June 2021.

As a result of the repeal of s758, it will be necessary for EU licensors to rely on the relevant treaty with the UK for reduction of withholding tax on the royalties they receive.

A number of EU member states permit tax consolidation/ fiscal unity etc. grouping for offsetting profits and losses when local subsidiaries are directly owned by a foreign EU company rather than by a domestic parent. Examples are Belgium, France, Ireland, Italy, the Netherlands, Spain and Sweden. This treatment often extends to tax-neutral asset transfers between fellow local subsidiaries owned by a foreign EU parent company (in cases where legislation does not permit EU ownership, a claim could nevertheless be made based on the ECJ decisions below).

This EU parent treatment follows from the decisions in Socit Papillon v Ministre du Budget, des Comptes publics et de la Fonction publique (Case C-418/07); and Netherlands v SCA Group Holding BV (Cases C-39/13, C-40/13 and C-41/13).

A UK company will no longer qualify as a parent company for tax consolidation purposes as it is no longer resident in an EU member state. As well as grouping going forward, this disqualification may have other repercussions in that the underlying subsidiaries will leave the existing group.

It is not yet known whether EU jurisdictions will amend their laws so that ownership by a UK parent company continues to permit tax consolidation/ fiscal unit etc. One exception is Ireland, which has extended its group relief treatment (for domestic loss offsets and asset transfers) to Irish groups directly owned by a UK parent company.

However, not all EU jurisdictions restrict group treatment to EU-owned subsidiaries. For example, the Netherlands permits ownership by a partner country with a treaty non-discrimination article. Spain permits ownership by a company resident in any country that is not a tax haven. A UK companys direct ownership of EU subsidiaries in those jurisdictions should therefore continue to allow for tax consolidation, etc.

However, where direct ownership by a UK company disqualifies consolidation, the non-discrimination article of a UK tax treaty with the EU regime in question may still permit tax-consolidation of subsidiaries without the interposition of a local holding company. The claim could arise under a tax treaty based on Art 24.5 of the OECD Model Treaty, which prevents discrimination arising from foreign ownership. This principle was established in R & C Commrs v FCE Bank plc [2012] EWCA Civ 1290 where disqualification of group relief because of foreign ownership was held to be discriminatory. (That was because pre 2000, UK group relief rules required UK subsidiaries to be owned by a UK parent, whereas the FCE subsidiaries were owned directly from the US).

A contrary ruling was given by the Netherlands Supreme Court in the case of the Dutch fiscal unity regime (Verdrag Nederland Israel NL Fiscaal (16/02919)). This ruling arose as a result of the specific wording of the Dutch regime.

Clearly, each tax consolidation/fiscal unity regime needs to be closely analysed in determining whether a UK-parented EU group qualifies as a result of a non-discrimination article.

There is no change in the group relief position. Sections 131 and 152, CTA 2010, allow for foreign (and not just EU) ownership of a UK group in establishing qualification for group relief. Section 171, TCGA 1992, similarly allows for tax-neutral asset transfers between fellow UK subsidiaries owned by a foreign parent company (whether or not EU resident).

Freedom from withholding on the dividends paid to the UK company under the Parent Subsidiary Directive will not apply since the UK is no longer a member state.

It is not yet known whether EU jurisdictions may reciprocally amend their laws so that freedom from withholding tax continues to apply.

In the absence of any change, the Table indicates rates of dividend withholding tax under the UKs treaties with all 27 EU member states. Most rates are zero but there are some exceptions marked in bold.

At the UK level, dividends received are generally exempt from UK tax on a worldwide basis.

There is no UK withholding tax on outbound dividends.

At the EU level, some EU jurisdictions give preference to dividends received from EEA subsidiaries. For example, Poland exempts from corporate income tax only dividends from EEA (and Swiss) subsidiaries. France exempts 95% of dividends, but increases this to 99% for dividends from EEA subsidiaries. These EEA benefits will no longer apply. A Polish company receiving dividends from its UK subsidiary will then be taxable (but with a credit for the underlying UK corporation tax). A French company will then be exempt on only 95% of dividends received from its UK subsidiary.

It is not yet known whether these and any other relevant EU jurisdictions may reciprocally amend their rules to give continuing preference to dividends received from UK companies now that the UK is no longer a member state.

It is assumed that a UK company owns a holding company in Luxembourg that receives dividends from its US subsidiaries. It will suffer the full 30% US withholding tax rate. That is because, unless the treaty is amended, the Luxembourg company will fail the Limitation on Benefits equivalent beneficiary test of Art 24.4 LuxembourgUS treaty which requires it to be 95% owned, inter alia, by a resident of the EU (or in some cases the EEA)).

The same equivalent beneficiary provision is included, for example, in the USs treaties with Belgium, France, Germany, Ireland, Luxembourg, Netherlands, Spain and Sweden.

It is not yet known whether these countries treaties with the US will be amended to extend the 95% ownership test to UK companies.

The First-tier Tribunals (FTTs) 25 March 2019 decision in Gallaher Limited [2019] UKFTT 0207 (TC) held that immediate UK tax should not apply to a UK companys transfer of shares to a Dutch group member. It would violate the right to EU freedom of establishment since a transfer to a UK group member would have been tax-neutral under s171, TCGA 1992.

The Upper Tribunal has now referred the case to the ECJ (Gallaher Limited [2020] UKUT 354 (TCC)), which will retain jurisdiction since the referral was made before the end of the transitional period on 31 December 2020.

Following the FTT decision, Sch 3ZC was added to TMA 1970 and allows UK companies making asset transfers to group companies in EEA states to defer payment of corporation tax with interest over a period of no later than five years and nine months from the end of the accounting period in which the asset transfer takes place.

There has been no change to these rules.

The Gallaher disposal took place when no instalment plan existed. The FTT therefore ruled that the entire gain should be deferred. Taxpayers in a similar situation could make the same assertion, subject to the outcome of the ECJ decision. However, this may depend on whether the relevant claim has been made before 1 January 2021.

Subject to the ECJs decision in Gallaher (see above), it may be possible in principle for an EU company to transfer assets to a UK group member without immediate taxation.

This seems unlikely to apply now that the UK is no longer a member state. However, it is not yet known whether EU states may reciprocally permit deferral of tax on assets transferred to a UK group member.

Article 2(a) of the EU Merger Directive broadly defines a merger as the dissolution of a company, with the transfer of its assets and liabilities to another company in exchange for its shares issued to the dissolved companys shareholders.

Assuming the foreign branch exemption does not apply, s140F, TCGA 1992, which transposes Art 10.2 of the Merger Directive, provides that the gains arising on UK2s transfer of its EU branch assets to the EU company may be mitigated. Naturally, this is the same treatment that applies under s140C to a UK companys EU branch incorporation (see para 5).

The Regulations have now amended s140F so that it refers to each of the merging companies being resident in the UK or a member state (rather than only in a member state). The merging EU company will continue to be in that category and so the sections will continue to apply.

UKCo will have disposed of its shareholding in UK2 as a result of the merger. The gain arising, based on the market value of the shares, would normally be covered by the substantial shareholding exemption. If not, s140G, TCGA 1992, which transposes Art 7 of the Merger Directive, would apply to exempt the gain.

Once again, the Regulations have been similarly amended so that s140G continues to apply to exempt a UK companys gains on dissolution of its shareholding in the EU company.

As far as mitigation in the EU branchs jurisdiction is concerned, the position is outlined in paragraph 5 in relation to a UK companys incorporation of its EU branch.

It is not yet known whether EU jurisdictions will reciprocally amend their equivalent transpositions of the Merger Directive to include the UK now that it is no longer a member state.

The merger process is the opposite of the diagram above, namely: An EU company (EU1) owns an EU subsidiary (EU2) whose sole activity is carrying on a branch business in the UK. EU2 is dissolved with its UK branch assets and liabilities transferred neutrally to a UK company in exchange for an issue of shares or debentures by the UK company to EU1.

The simplest process for a tax-deferred transfer of EU2s transfer of its UK branch assets to the UK company is under s171, TCGA 1992.

However, assuming that reliance on the Merger Directive is preferable, the relevant Art 4 Merger Directive transposition is s140E, TCGA 1992. Again, the Regulations have amended s140E so that it refers to transferors and transferees resident in a member state or the UK (rather than only a member state as previously).

The section therefore continues to apply to an EU companys dissolution of its UK branch into a UK company.

Assuming the EU jurisdiction does not apply a foreign branch exemption to the gain on transfer of the UK branch assets, its transposition of Art 10.2 of the Merger Directive might provide relief in theory. In practice, it appears to be ineffective because Art 10.2 provides a hypothetical credit for the UK tax that would have been payable but for the Merger Directive. Even before Brexit, this relief appears to be ineffective. UK neutrality applies to the branch transfer as a result of s171, TCGA 1992 (below), not as a result of the Merger Directive.

Under the terms of the Trade and Cooperation Agreement, the UK has committed to implementing BEPS deliverables and not to dilute UK provisions on automatic exchange of information, interest limitation, controlled foreign companies and hybrid mismatch below the OECD minimum standards in place on 31 December 2020.

In compliance with ATAD, the UK has where necessary amended or implemented its rules relating to the ATAD requirements, namely; controlled foreign companies, interest limitation, exit taxation, general anti abuse rules and double tax switchover.

At this stage, the UK has made two meaningful changes to its corporate tax rules as a result of Brexit.

On the one hand, there has been a UK continuation into the Merger Directive (see paragraph 22). On the other hand, legislation implementing the Interest and Royalties Directive is to be repealed (see paragraphs 12 and 14). And as mentioned, the UK has withdrawn from most of DAC6.

It remains to be seen whether EU member states will reciprocate the UKs continuing tax reliefs for EU-related areas such as group relief (where Ireland has made changes see paragraph 15), exit tax, and merger rules. And whether the UK may make further amendments to its rules to exclude the EU should reciprocity not be forthcoming.

The author would like to thank the following colleagues for their contributions to the article:

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TAXguide 09/21: Brexit The corporate tax implications - economia