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Tax increases for leveraged projects?

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Charles Yorke

Partner

London

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23 March 2016

​The Chancellor made two announcements in his Budget speech on 16 March that should be of interest to investors and lenders involved in project finance transactions in the UK:

1. the UK will press ahead with the introduction of a limit on the deductibility of interest payments; and

2. new restrictions will apply to reduce the extent to which tax losses can be set against future profits.

In each case the proposals will take effect from 1 April, 2017 and could prejudice the tax assumptions included in any financial model prepared or being updated in connection with a UK project financing.

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