HMRC internal manual

International Exchange of Information Manual

What is a ruling: Overview

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

IEIM520010: What is a ruling? Overview

Guidance on definition of rulings for the purposes of automatic exchange agreed by the OECD under BEPS Action 5 can be found at IEIM540100.

The definition of a ruling is based on the concept that a specific customer (or group of customers) is being entitled to rely on the advice, information or undertaking provided by a tax authority concerning their tax situation. 

The term ruling also relies on the concept of legitimate expectation, which is discussed at IEIM520100; that guidance also provides a list of situations that will definitively involve providing a ruling.

Rulings may be given before or after the event or transaction in question, but to be exchangeable they would need to be given before the tax return is submitted that covers the event or transaction (IEIM520800).

The form the ruling takes is not specified but would normally be given in writing in a letter or email. 

It does not matter whether the transaction has been carried out by the customer after the ruling has been given.  There is no requirement to confirm the transaction has taken place; the ruling should be exchanged at or soon after the assurance is provided to the customer (IEIM570400). 

If you have concerns whether something does or does not amount to a ruling, please contact JITSIC.


Advanced Pricing Agreements

BEPS Action 5 also requires the exchange of APAs, including advance thin capitalisation agreements.  There is further guidance on the definition of APAs at IEIM520200.