The UK Government has announced its intention to introduce further changes to the rules on how groups of companies are taxed when they buy back their issued debt at a discount to the amount borrowed.

The changes are in addition to the proposed legislation announced on 14 October 2009, and are designed to prevent companies avoiding the discount that was not taxed at the time of the buyback, being taxed on the subsequent release of the debt.

The legislation will have effect in relation to releases of debt that occur on or after 9 November 2009 which relates to any debt that was subject of a debt buyback occurring on or after 14 October and to which the proposed legislating announced on 14 October will apply.

Further details of the proposed amendments together with the full statement of the Financial Secretary to the Treasury can be accessed at http://www.hmrc.gov.uk/drafts/debt-buyback.htm