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July 2015 Budget: key financial services announcements
Practical Law UK Legal Update 6-617-2233 (Approx. 5 pages)
July 2015 Budget: key financial services announcements
| Published on 09 Jul 2015 • United Kingdom |
Our summary of the key measures in the July 2015 Budget of interest to financial services practitioners.
Speedread
As previously reported, on 8 July 2015, George Osborne, Chancellor of the Exchequer, delivered the July 2015 Budget.
This legal update summarises the key measures in the July 2015 Budget of interest to financial services practitioners and contains links to other relevant Practical Law content on the Budget. It includes measures relating to:
- Banking.
- Investment funds.
- Insurance.
- Pensions.
- Financial intermediaries and advisers.
- Financial sanctions.
For a general summary of the key business tax announcements (which includes some financial services measures), see Legal update, July 2015 Budget: key business tax announcements.
On 8 July 2015, George Osborne, Chancellor of the Exchequer, delivered the July 2015 Budget. The government papers relating to the July 2015 Budget are available on its website.
This legal update summarises the key measures in the July 2015 Budget of interest to financial services practitioners and contains links to other relevant Practical Law legal updates on the July 2015 Budget.
Banking
The July 2015 Budget contained announcements on the following measures and policy decisions particularly relevant to the banking sector:
- A phased reduction of the bank levy rate (see Legal update, July 2015 Budget: key business tax announcements: Bank levy reduction and restriction).
- An update to the definition of a banking company used in UK tax legislation (see Legal update, July 2015 Budget: key business tax announcements: Updated bank definitions).
- A new tax on banking sector profit that will apply from 1 January 2016 set at 8% (see Legal update, July 2015 Budget: key business tax announcements: Bank corporation tax surcharge).
- Legislation to prevent banks and building societies from claiming a corporation tax deduction for compensation payments made to customers relating to misconduct (see Legal update, July 2015 Budget: key business tax announcements: Denial of corporation tax deduction for bank compensation payments).
- Extending the £25 million allowance within the bank loss relief legislation to cover banks incorporated under the Savings Bank (Scotland) Act 1819 (see Legal update, July 2015 Budget: key business tax announcements: Restricted banking losses: savings banks).
- Legislation requiring the major banks to share credit information on their small and medium-sized enterprise (SME) customers with other finance providers through designated credit reference agencies (CRAs) and offer SMEs the opportunity to be referred to finance platform that can help match them with alternative lenders. This announcement relates to HM Treasury's powers to make regulations on these issues under the Small Business, Enterprise and Employment Act 2015 (see Legal update, Small Business, Enterprise and Employment Bill 2014-15 receives Royal Assent: financial services aspects).
Investment funds
The July 2015 Budget contained announcements on the following measures and policy decisions particularly relevant to the investment fund management sector:
- Legislation to ensure that sums that arise to investment fund managers by way of carried interest are charged to the full rate of capital gains tax (CGT) (see Legal update, July 2015 Budget: key business tax announcements: Carried interest: immediate end to the "base cost shift").
- A consultation on the circumstances in which fund managers' performance-related returns should benefit from CGT treatment (see Legal update, July 2015 Budget: key business tax announcements: Consultation: tax treatment of fund managers' performance-related returns).
- A consultation on changes to limited partnership legislation to enable private equity and venture capital funds to use the limited partnership structure more effectively (see Legal update, July 2015 Budget: key business tax announcements: Private equity and venture capital: limited partnerships).
Insurance
The July 2015 Budget contained announcements on the following measures and policy decisions particularly relevant to the insurance sector:
- A report from the Insurance Fraud Taskforce by the end of 2015 on ending the impact of fraud on insurance premiums.
- An FCA review on insurance premium transparency to encourage consumers to shop around when renewing insurance.
- An increase in the standard rate of insurance premium tax (IPT) (see Legal update, July 2015 Budget: key business tax announcements: Insurance premium tax: increase in standard rate).
Pensions
The July 2015 Budget contained announcements on the following measures and policy decisions particularly relevant to the pensions sector:
- An extension of the scope of the Pension Wise service to those aged 50 and above (see Legal update, July 2015 Budget: key pensions announcements: Access to Pension Wise).
- A consultation "before the summer" on barriers to access to pensions flexibilities (see Legal update, July 2015 Budget: key pensions announcements: Barriers to using flexible access options).
- A delay until 2017 to the implementation of the secondary annuities market (see Legal update, July 2015 Budget: key pensions announcements: Secondary annuities market).
Financial intermediaries and advisers
The government intends to legislate to require financial intermediaries (including tax advisers) to notify their customers about the Common Reporting Standard (CRS), the penalties for evasion and the opportunities to disclose (see Legal update, July 2015 Budget: key business tax announcements: Common Reporting Standard: intermediaries' duty to provide information).
Financial sanctions
The July 2015 Budget contained the following measures and policy decisions relating to financial sanctions:
- The establishment in HM Treasury during the 2015-16 financial year of an Office of Financial Sanctions Implementation. The Office is intended to provide a service to the private sector to ensure that financial sanctions are properly understood, implemented and enforced.
- Legislation "early in this Parliament" to increase the penalties for non-compliance with financial sanctions.