Change intended to maintain consistency with tax treatment in other countries
HMRC has published draft legislation to clarify the tax treatment under CTA 2010 s 1015(4) of regulatory tier two capital. Greg Clark, financial secretary to the Treasury, said on Friday that the government was clarifying the tax treatment of capital instruments issued by banks to ensure compliance with regulatory capital requirements under the forthcoming capital requirements directive IV.
‘Tier two capital instruments may now need to include a reference to the fact that these instruments may be subject to a regulatory requirement to be either written down or converted to share capital at the point at which a bank nears insolvency,’ Clark said. ‘Changes to existing tax legislation will ensure that the tax treatment … is unaffected by this requirement. This is consistent with the tax treatment provided in other countries.’
Change intended to maintain consistency with tax treatment in other countries
HMRC has published draft legislation to clarify the tax treatment under CTA 2010 s 1015(4) of regulatory tier two capital. Greg Clark, financial secretary to the Treasury, said on Friday that the government was clarifying the tax treatment of capital instruments issued by banks to ensure compliance with regulatory capital requirements under the forthcoming capital requirements directive IV.
‘Tier two capital instruments may now need to include a reference to the fact that these instruments may be subject to a regulatory requirement to be either written down or converted to share capital at the point at which a bank nears insolvency,’ Clark said. ‘Changes to existing tax legislation will ensure that the tax treatment … is unaffected by this requirement. This is consistent with the tax treatment provided in other countries.’
