Non-qualifying corporate bonds (non-QCB) meaning

In this issue: Banking and finance Commercial Corporate Data protection and cybersecurity Financial services Free movement, immigration and employment Energy Environment IP Life sciences Regulatory TMT Daily and weekly news alerts New and updated content Trackers Banking and finance ECB releases annual report on supervisory activities for 2023 The European Central Bank (ECB) has released its 2023 report on supervisory activities, alongside opening remarks by Claudia Buch, chair of the Supervisory Board, delivered at a hearing with the European Parliament’s Economic and Monetary Affairs Committee (ECON). Buch outlined the outlook for EU banking, the ECB’s supervisory priorities, and steps towards completing the EU Banking Union. See: LNB News 21/03/2024 26. Council of the EU adopts MREL ‘daisy chain’ directive The Council of the EU has adopted a directive amending the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR), introducing targeted proportionality...

In this issue: Commercial Corporate Data protection and cybersecurity Financial services Energy Environment Insurance and reinsurance IP Life sciences TMT International trade Daily and weekly news alerts Trackers Commercial Commissioner McGrath briefs MEPs on future consumer protection initiatives On 8 April 2025, European Commissioner for Democracy, Justice, the Rule of the Law and Consumer Protection, McGrath, briefed MEPs on forthcoming consumer protection initiatives. See: LNB News 08/04/2025 41... Corporate European Parliament votes to postpone corporate sustainability and due diligence rules Following the Commission’s omnibus package of 26 February 2025, the European Parliament approved a delay to applying the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D) for certain companies. On 3 April 2025, the vote was 531 in favour, 69 against, and 17 abstentions. For the largest companies, CS3D will be deferred by one year. Member States have until 26 July 2027...

UK Finance responds to FCA consultation on aligning sustainability disclosures with ISSB standards UK Finance has issued its reply to the Financial Conduct Authority’s consultation on bringing sustainability-related disclosures into line with international standards, backing the plan to embed the UK Sustainability Reporting Standards within the Listing Rules and to align with the International Sustainability Standards Board baseline, while underlining the need for international consistency and comparability. It supports the proposed ‘comply or explain’ model, yet seeks clearer signalling on the FCA’s next steps, including whether the regime will persist in its current form or shift towards mandatory adherence. The submission also urges consideration of the implications for the competitiveness of UK listings and for the broader corporate reporting landscape, and says the FCA should take a proportionate, supportive supervisory stance, especially during initial implementation, acknowledging that firms may rely on best endeavours as capabilities mature. UK Finance further stresses that using the ‘explain’ option should not be equated with non-compliance, and it does not support introducing...

The way consideration payable for buying shares is arranged is rarely simple or linear, and can vary considerably. In many situations payment is postponed, deferred, or made conditional on a particular contingency being satisfied. Selling shareholders will look to maximise the overall price for their shares while also seeking to limit, so far as possible, any tax on disposal by: making full and efficient use of available reliefs to cut or remove any charge, and/or delaying the point in time at which any such tax becomes due However, where the consideration is deferred, the seller can become liable to tax immediately on an amount not yet received (a ‘dry’ tax charge). In calculating chargeable gains, no discount is usually allowed in respect of any consideration that is ascertainable at the date of disposal, even where it is: deferred subject to a contingency, or at risk of not being received for any reason Where any deferred...

This Practice Note is about: the anti-avoidance rule in section 137 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), which: prevents a shareholder from obtaining relief under TCGA 1992, s 135, that is, where the shareholder exchanges shares or loan notes in company A for shares or loan notes issued by company B. For more detail on the relief available under TCGA 1992, s 135, see Practice Note: Share for share exchanges and qualifying corporate bonds (QCBs); and prevents a shareholder from obtaining relief under TCGA 1992, s 136, that is, where, as part of a scheme of reconstruction, the shareholder’s shares in company A are retained, cancelled or extinguished and company B issues shares or loan notes to the shareholder. For more detail on the relief available under TCGA 1992, s 136, see Practice Note: Tax reliefs for schemes of reconstruction; and the anti-avoidance rule in TCGA 1992, s 139, which stops...

Shari’a-compliant financing arrangements Shari’a‑compliant financing arrangements, otherwise described as Islamic financing arrangements, can be structured in a number of ways. To cater for the direct tax analysis of Shari’a financing variants, the UK has put in place specific provisions known as the alternative finance arrangement rules. The purpose of these UK rules is to ensure that, for direct tax purposes, a qualifying Shari’a‑compliant financing is taxed in the same manner as an equivalent conventional financing arrangement. Achieving that parity depends upon the arrangements meeting the relevant statutory conditions prescribed for alternative finance arrangements in the applicable legislation. Currently, the regime extends to five distinct categories of financing arrangement. Importantly, the direct tax framework for alternative finance is not limited solely to Islamic financing; non‑Shari’a structures can, in principle, be brought within its scope as well. Among the five categories is the investment bond arrangement, commonly known as an alternative finance investment bond, or AFIB. This Practice Note deals with AFIB arrangements. Sukuk, which are a type of Shari’a financing...