The Summer Budget 2015 for banking and finance lawyers

The Summer Budget 2015 for banking and finance lawyers

With the Chancellor’s speech still ringing in our ears, we bring together the most important features of the Summer Budget 2015 for banking and finance lawyers alongside expert analysis and industry comment.

What was relevant in the Summer Budget for banking and finance lawyers?

The bank levy rate will decrease from 0.21% to 0.18% from 1 January 2016 and will continue to decrease each calendar year thereafter until 2021. A proportionate decrease to 0.09% with effect from 1 January 2016 will be made to the half rate, with corresponding reductions being made each following calendar year until 2021. Legislation will be introduced in the Summer Finance Bill 2015 to amend the Finance Act 2011, Sch 19, paras 6, 7.

Summer Budget 2015: TIIN—Corporation Tax—modernisation of the taxation of corporate debt and derivative contracts.

The rules governing the taxation of corporate debt (known as loan relationships) and derivative contracts are updated by a new measure announced by the government at Summer Budget 2015. The measure affects companies which are subject to corporation tax, which issue or hold debt or which are party to derivative contracts.

Summer Budget 2015: TIIN—Restricting tax relief for banks compensation payments July 2015

The government has introduced a measure ensuring large compensation payments, made in relation to banks’ past misconduct and management failures, do not affect corporation tax receipts. This is to ensure the banking sector makes appropriate contributions to restoring public finances.

Summer Budget 2015—TIIN: Bank Corporation Tax surcharge

The government has announced that a surcharge of 8% is to be imposed on the profits of banking companies. The profits will be calculated on the same basis as for corporation tax, but with some reliefs added back. The surcharge will be levied on profits of banking companies in accounting periods beginning on or after 1 January 2016. Where a company’s accounting period

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About the author:

Neeta has been working as a paralegal in Banking and Insolvency for the past 4 and a half years.

She started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice Course. She moved to Lexis®PSL in April 2013.