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HMRC on September 12, 2024, published additional  for consultation regarding the UK's Pillar Two global minimum tax rules.

This is the third version of draft HMRC guidance regarding the UK multinational top-up tax (MTT) and domestic top-up tax (DTT); previous draft versions were published in June 2023 and December 2023.

Comments on the guidance are due by October 23, 2024.

The draft guidance includes the new content regarding:

• Attributing top-up amounts to responsible members
• Reference table showing differences between the MTT and DTT
• Sub-divided entities
• Qualifying domestic Minimum top-up tax (QDMTT) safe harbor 
• Line-by-line basis
• Controlled foreign company (CFC) tax expense and blended CFC regimes
• Qualifying tier one capital
• Transferable tax credits
• Calculation of top-up amounts, including guidance on the substance based income exclusion
• Permanent establishments
• Deemed continuity of partnerships
• Non-standard members and minority owned members 
• Restructures
• Investment entities
• Transitional provisions

The updated draft guidance does not yet cover all of the provisions in the UK Pillar Two legislation and further supplemental guidance is expected later in the year. It is expected such guidance will address flow-through entities, joint ventures, the undertaxed profits rule (UTPR), tax equity partnerships, post-filing adjustments of covered taxes, and additional top-up amounts.

Read a September 2024 report prepared by the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø member firm in the United Kingdom