Financial Services and Markets Act 2000 (Regulated Activities)

David Gauke Excerpts

Friday 19th November 2010 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

It has been brought to the Government’s attention that the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2010 (“the 2010 Order”), which came into force on 24 February 2010 has unintentionally had a number of potential adverse consequences for the tax and regulatory treatment of some types of debt securities.

The Government intend at the earliest practicable opportunity to make the necessary amendments in secondary legislation to restore the legal position in respect of the potentially affected debt securities. This will rectify the potential problem going forward.

Action will also be taken to ensure that no unintended consequences arise for the potentially affected debt securities regarding regulatory or tax treatment between the coming into force of the 2010 Order on 24 February 2010, and the date on which the remedying amendments come into force.

HMRC has confirmed that it will take no action to establish or collect any tax liabilities that may arise from these unintended consequences. The Government will introduce, as necessary, legislation in the next Finance Bill to restore previous expectations about the way that potentially affected debt securities are taxed, subject to an opt-out to ensure the retrospective application of new legislation does not increase tax liabilities.