FTI Consulting's Response to UK Government's
Consultation Period on the Reform of Sovereign Immunity
The UK Government's consultation period on the
reform of sovereign immunity from direct taxation closed on 12
September 2022, with FTI Consulting having been directly involved
in discussions with the government and submitting a detailed
consultation response.
The proposed changes
As part of the initial consultation document, the government
proposed the following substantial changes to be implemented from
April 2024:
Sovereign immunity from all UK direct taxation will be removed
and replaced with a limited sovereign exemption from UK tax for
UK-source interest income, which will be administered via an
exemption from the UK withholding tax (“WHT”).
