That鈥檚 what the US president鈥檚 cut in business tax is worth to the UK-based construction giant鈥檚 bottom line. And there is more to come.
The US government recently passed the Tax Cuts & Jobs Act which contains significant tax reform measures. Although the reforms are subject to further guidance and interpretations from the US Authorities, Balfour Beatty has been looking at the implications of the changes.
The reduction in US Federal corporate income tax rates from 35% to 21% will lead to a reduction in the effective tax rate on US earnings from c.40% to c.26% in 2018 and beyond.
Furthermore, as a result of this reduced tax rate on US assets the directors鈥� valuation of Balfour Beatty Investments portfolio will increase by approximately 拢95m.
In addition to this, the company expects 2017 earnings to benefit from a one-off non-cash credit from the revaluation of US deferred tax liabilities, expected to be approximately 拢20m.
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