This year's Budget confirms the Government's plans to introduce legislation during 2011 to implement the planned structural reforms to UK financial services regulation. It also confirms recent developments on bonuses for staff in the main UK banking groups, banks' promises on lending and the planned increase in the bank levy. It also announces plans that will affect taxation elsewhere in the financial sector, including:

  • looking at tax issues associated with new bank capital instruments in the light of Basel III;
  • consulting in June on plans to introduce a tax-transparent fund vehicle;
  • enabling UCITS to be managed from the UK without adverse tax consequences and amending the "Genuine Diversity of Ownership" conditions for master/feeder funds;
  • legislating on the post-Solvency II life insurance tax regime;
  • Introducing direct tax rules for Shari'ah-compliant variable loan arrangements and derivatives;
  • putting right the unintentional adverse tax effects on some types of debt security; and
  • modernising the investment trust company regime.

(Source: Budget 2011)