Finance Bill Tracking Service 2010 | Budget 2010


Who is likely to be affected?

1. Large multinational groups of companies in the financial sector.

General description of the measure

2. Legislation will be introduced in Finance Bill 2010 to include a regulation-making power in the legislation relating to risk transfer schemes announced at the 2009 Pre-Budget Report.

Operative date

3. The regulation-making power will be brought in alongside the provisions relating to risk transfer schemes. The commencement date for these provisions is 1 April 2010 but transitional provisions will apply for schemes that straddle this date. Any regulations made under this power will have effect from the date laid.

Current law and proposed revisions

4. The legislation relating to risk transfer schemes covers financial instruments that are treated for tax purposes as loan relationships or derivative contracts. The regulation-making power will allow regulations to be laid to extend the scope of those provisions to cover other instruments held on trading account by financial traders. This power could be used in the event that financial companies seek to enter into risk transfer schemes that do not involve loan relationships and/or derivative contracts, but instead seek to get around the legislation by using different instruments.

5. Any regulations made under this power will be subject to the negative resolution procedure.

Further advice

6. If you have any questions about this change, please contact Aidan Reilly on 020 7147 2575 (email: or Paul Gilham on 0207 147 2619 (email: Information about Budget measures is available on the HM Revenue & Customs website at