A historic shift in the corporate tax regime was unveiled by the Treasury on Tuesday as it sought to shore up Britain’s reputation as an attractive business location in the wake of an exodus of multinationals.

The Treasury described its proposed tax exemption for dividends received by multinationals from foreign subsidiaries as “one of the most generous” in the developed world. Its consultation document said: “The policy objective is to enhance the competitiveness of the UK by providing the widest possible exemption.”