The government has laid regulations to replace existing legislation exempting regulatory capital issued by banks and insurers from counteraction under the hybrid and other mismatch rules.
The Hybrid and Other Mismatches (Financial Instrument: Exclusions) Regulations, SI 2019/1251, come into force on 29 November 2019 and take effect in relation to payments made on or after 1 January 2019 and quasi-payments (amounts which arise or accrue that give rise to allowable tax deductions) in relation to which the payment period begins on or after that date.
Finance Act 2019 removed the existing exemption for regulatory capital from counteraction under the hybrid and other mismatches rules in order to comply with the EU anti-tax avoidance directive (ATAD) from 1 January 2019. It replaced this exemption with a power to make regulations specifying exclusions from the meaning of ‘financial instrument’ which may also be exempted from counteraction.
HMRC published a technical note in October 2018 (see bit.ly/2GFq549) to provide guidance on the revocation of the regulatory capital security regulations and the new rules introduced in Finance Act 2019.
The government has laid regulations to replace existing legislation exempting regulatory capital issued by banks and insurers from counteraction under the hybrid and other mismatch rules.
The Hybrid and Other Mismatches (Financial Instrument: Exclusions) Regulations, SI 2019/1251, come into force on 29 November 2019 and take effect in relation to payments made on or after 1 January 2019 and quasi-payments (amounts which arise or accrue that give rise to allowable tax deductions) in relation to which the payment period begins on or after that date.
Finance Act 2019 removed the existing exemption for regulatory capital from counteraction under the hybrid and other mismatches rules in order to comply with the EU anti-tax avoidance directive (ATAD) from 1 January 2019. It replaced this exemption with a power to make regulations specifying exclusions from the meaning of ‘financial instrument’ which may also be exempted from counteraction.
HMRC published a technical note in October 2018 (see bit.ly/2GFq549) to provide guidance on the revocation of the regulatory capital security regulations and the new rules introduced in Finance Act 2019.
