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UK: Regulations amending hybrid mismatch rules for capital instruments, capital securities

UK: Regulations amending hybrid mismatch rules

There are new regulations in the UK concerning the hybrid mismatch rules and implications for certain capital instruments and regulatory capital securities.


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New regulations amend hybrid capital instruments rules, for corporation tax relief on coupon payments on regulatory capital securities, used by banks and insurers. Since 1 January 2019, the “hybrid capital instruments” rules are relied upon by many banks and insurers to give corporation tax relief for the coupon payments on regulatory capital securities. These rules were amended by the Taxation of Hybrid Capital Instruments (Amendment of Section 475C of the Corporation Tax Act 2009) Regulations 2019, SI 2019/1250.

Read a September 2019 report prepared by the KPMG member firm in the UK

New regulations exempt “regulatory capital securities” from being “financial instruments” for purposes of the hybrid and other mismatches rules. The Hybrid and Other Mismatches (Financial Instrument: Exclusions) Regulations 2019, SI 2019/1251 now give effect to the government’s previous announcement, exempting “regulatory capital securities” from being “financial instruments” for the purposes of Chapter 3 of the Hybrid and Other Mismatches rules in Part 6A TIOPA.

Read a September 2019 report prepared by the KPMG member firm in the UK

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