Helen Lethaby provides this month's update on tax issues affecting the City, including consultation resulting from Basel III, recent accounting changes, the overlooked decision in Audley and an update
on the GAAR study
Regulatory capital instruments
An informal consultation has begun on what UK tax law changes may be necessary to accommodate new loss-absorbent forms of capital instrument proposed by the Basel Committee on Banking Supervision as part of wider regulatory reform (Basel III).
As noted in the discussion paper circulated by HMRC on 13 May Basel III shifts the focus of regulatory capital requirements from ‘total capital’ (ie Tier 1 and Tier 2) to ‘Core’ Tier 1 (common equity) while imposing additional requirements for additional Tier 1...
