2013 No. 460
Capital Gains Tax
Corporation Tax
Income Tax
Stamp Duty
Stamp Duty Reserve Tax

The Building Societies (Core Capital Deferred Shares) Regulations 2013

Approved by the House of Commons
Made
Coming into force in accordance with regulation 1(1)
The Treasury make the following Regulations in exercise of the powers conferred by section 221 of the Finance Act 20121.

A draft of this instrument was laid before and approved by a resolution of the House of Commons in accordance with section 221(6) of the Finance Act 2012.

Citation, commencement and effect1.

(1)

These Regulations may be cited as the Building Societies (Core Capital Deferred Shares) Regulations 2013 and come into force on the day after the day on which they are made.

(2)

These Regulations have effect in relation to shares issued, and securities converted into shares, on or after that date.

Core capital deferred shares2.

(1)

In these Regulations, “core capital deferred shares” are deferred shares that form part of the core tier one capital of a building society.

(2)

For the purposes of this regulation—

(a)

“building society” and “deferred shares” have the same meanings as in the Building Societies Act 19862, and

(b)

the reference to “core tier one capital” is to be read in accordance with the Handbook of Rules and Guidance made by the Financial Services Authority (as that Handbook has effect from time to time)3.

Disapplication of provisions3.

(1)

The following provisions do not apply in relation to core capital deferred shares—

(a)

section 109 of the Building Societies Act 1986 (exemption from stamp duty),

(b)

section 372 of ITTOIA 2005 (building society dividends)4,

(c)

section 889 of ITA 2007 (payments in respect of building society securities)5,

(d)

the exclusion of a share in a building society in the definition of “share” in section 476(1) of CTA 2009 (other definitions)6,

(e)

section 498 of CTA 2009 (building society dividends and interest),

(f)

section 1054 of CTA 2010 (building society payments) (and accordingly any interest, dividend or other distribution payable in respect of core capital deferred shares is a distribution of the society for corporation tax purposes).

(2)

Core capital deferred shares are not—

(a)

loan capital under section 78(7) of FA 19867,

(b)

qualifying corporate bonds under section 117 of TCGA 19928, or

(c)

restricted preference shares under section 160 of CTA 2010.

Mark Lancaster
Desmond Swayne
Two of the Lords Commissioners of Her Majesty’s Treasury
EXPLANATORY NOTE
(This note is not part of the Regulations)

These Regulations make provision in relation to the taxation of a certain type of regulatory capital instrument that may be issued by building societies. These instruments are known as “core capital deferred shares” and are defined in regulation 2 as deferred shares that form part of the core tier one capital of a building society. Regulation 3 disapplies tax and stamp duty provisions relating to building society shares in relation to core capital deferred shares and provides that such shares are not loan capital for stamp duty purposes under section 78(7) of the Finance Act 1986, qualifying corporate bonds under the Taxation of Chargeable Gains Act 1992 or restricted preference shares under section 160 of the Corporation Tax Act 2010.

A Tax Information and Impact Note covering this instrument will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.