EU tells Britain to align income tax rules with EU law

The European Commission on Thursday called on Britain to align with EU law its income tax rules concerning tax relief for losses resulting from the sales of shares, or face court action.

Currently, only shares in companies which carry out their business activities mainly in the United Kingdom can qualify for the relief.

“This rule puts taxpayers who invest in qualifying shares of companies which carry out their business in other EU member states than the United Kingdom at a disadvantage. It also imposes a restriction on the free movement of capital,” the EU executive said. Britain has two months to respond.