...use of brought forward tax losses
In response to the Chancellor's Autumn Statement announcement, Richard Milnes, Financial Services Tax Partner at business and financial adviser Grant Thornton UK LLP, comments on the restrictions on banks' use of brought forward tax losses:
"The possibility of restricting the speed of banks’ use of brought forward losses had previously been suggested by commentators during the financial crisis as a way of continuing to raise cash from the banking sector whilst the institutions recovered. Hitherto though this policy objective was tackled through a separate bank levy rather than through corporation tax loss restrictions, and in the meantime many UK banks have utilised significant amounts of their brought forward losses. Several other European countries do operate such a restriction though, so it is interesting that the UK is adopting this measure now, and raises the question whether this will permit a revision to bank levy policy. We also note that since the changes in the regulatory capital rules in relation to deferred tax assets introduced by Basel III and CRD IV, the new rule will impact negatively on banks’ capital ratios."