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U.K. Enacts Tax Regime for New Additional Tier 1 and Tier 2 Regulatory Capital Instruments  


Author:  Michael McGowan.; Andrew Thomson.; Emma Hardwick.


Source: Volume 31, Number 04, Summer 2014 , pp.81-90(10)




Journal of Taxation of Investments

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Abstract: 

The U.K. Parliament has approved regulations setting out the tax treatment of Additional Tier 1 and Tier 2 regulatory capital securities issued by U.K. financial institutions to reinforce their regulatory capital base under Basel III. The regulations offer welcome clarity and certainty for issuers of Basel III-compliant capital instruments in particular, and evidence the U.K.’s willingness to create a benign corporate tax environment for issuers of regulatory capital instruments in general.

Keywords: Basel III; CRD IV; Solvency II; regulatory capital; bank capital

Affiliations:  1: Sullivan & Cromwell LLP; 2: Sullivan & Cromwell LLP; 3: Sullivan & Cromwell LLP.

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