PUBLIC INTEREST BUSINESS PROTECTION
A stop gap protection Christy Wilson asks whether a new public interest business protection tax can stabilise the energy sector. Christy Wilson Tax Associate, Katten Muchin Rosenman UK LLP
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ver the last few months, numerous energy supply companies have gone under. In an attempt to stabilise the energy sector, the government has introduced a new temporary tax to deter investors in energy supply businesses from using the company’s assets for their own benefit. This new tax is the public interest business protection tax (PIBPT). The introduction of PIBPT means that investors in public interest companies, including energy supply businesses, may face a tax of 75% where the company’s assets are used for the benefit of the shareholders, and as a result this accelerates the collapse of said public interest business.
When will PIBPT apply?
PIBPT will apply to the following situations: ● A person holds an asset for the purposes of it being used for the benefit of a public interest business carried on by the person. ● Steps are taken by the person that result in the asset not being used for the benefit of the public interest business. ● The steps taken materially contribute to the public interest business going into special measures or materially contributes to a significant increase in the costs of that business. ● The person was aware (or ought to have been aware) that taking the steps would result in the business entering special measures or a significant increase in the costs of that business. Author bio
Christy Wilson is a tax associate in the Transactional Tax Planning practice at Katten Muchin Rosenman UK LLP.
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The government has outlined that the new tax will last from 28 January 2022 to 28 January 2023, but the government can extend the tax until 2025. ISSUE 122 | AIAWORLDWIDE.COM
