The government will proceed with all seven proposals with some changes to the policy designs as informed by stakeholder feedback.  

The government will continue to work closely with stakeholders on the detailed policy design and technical aspects of the reforms. This will include carrying out a full technical consultation on the draft legislation in 2027.

The government intends for the changes to apply prospectively from April 2028, following completion of the technical consultation.

The rules concerning what constitutes a distribution for tax purposes have remained largely unchanged since 1965.

This consultation seeks views on proposals to update seven parts of these rules, where legislation has not kept pace with commercial practice. The proposals aim to improve clarity and consistency, by reducing unintended differences in tax treatment and the scope for error and non-compliance. We intend to ensure that genuine commercial activity is not affected and wider impacts on investment and attractiveness are fully considered.

The focus of this consultation is where the shareholder is an individual; the proposals are not intended to affect corporate shareholders directly.

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