- HMRC is consulting on reforms to the taxation of UK-resident individuals who are members of reverse hybrid entities, including US Limited Liability Companies.
- The consultation identifies that entity classification mismatches between the UK and other jurisdictions can give rise to unintended high effective tax rates or double taxation, and seeks views on legislative changes to mitigate this issue.
- The proposals are focused on individuals investing in entities that are treated as transparent in their jurisdiction of establishment but opaque for UK tax purposes.
- HMRC is seeking evidence on the practical impact for individuals and businesses, including how the current rules affect investment structures and commercial decisions.
- Timing: the consultation closed on 31 July 2026. The government will publish a response to the consultation in due course
Resources (click to open)
