Q&As

Must the issuer of an instrument be regulated (for instance, by the Prudential Regulation Authority) in order for that instrument to be able to qualify as a regulatory capital security under the Taxation of Regulatory Capital Securities Regulations 2013, SI 2013/3209 on the basis of being an Additional Tier 1 instrument under the Capital Requirements Regulations?

read titleRead full title
Published on LexisPSL on 19/09/2018

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Must the issuer of an instrument be regulated (for instance, by the Prudential Regulation Authority) in order for that instrument to be able to qualify as a regulatory capital security under the Taxation of Regulatory Capital Securities Regulations 2013, SI 2013/3209 on the basis of being an Additional Tier 1 instrument under the Capital Requirements Regulations?

Regulatory capital securities, broadly, means securities issued by financial institutions and insurance companies to meet their regulatory capital requirements. Regulatory capital includes common equity (ie shares) and also certain debt instruments that have many equity-like characteristics.

The Taxation of Regulatory Capital Securities Regulations 2013 (Regulatory Capital Securities Regs 2013), SI 2013/3209 apply to regulatory capital securities to ensure that they fall to be taxed and relieved under the loan relationships rules and to provide certainty in respect of how they are taxed. For instance, the Regulatory Capital Securities Regs 2013 provides that:

  1. a regulatory capital security is to be treated as a loan relationship for corporation tax purposes and as a normal commercial loan

  2. a payment in respect of a regulatory capital security is to be treated as i

Related documents:

Popular documents