A year ago the UK tax treatment of perpetual debt issued by banks and insurers looked seriously problematic. But much has changed over the past 12 months and the tax directors of UK banks can now look forward with some confidence to the new ‘regulatory capital’ regime that is to be introduced across the EU. It remains to be seen, though, exactly how HMRC will implement the legislative fix that it has promised for new ‘tier 1’ capital; and, for UK insurers that want to issue tier 1 capital, there is still no solution in sight.
