The Assistant Treasurer has announced 3 changes relating to capital instruments:

• the debt/equity transitional period for Upper Tier 2 instruments has been extended to 1 July 2010 to enable issuers sufficient time to amend their instruments to come within the terms of a final set of Upper Tier 2 regulations which are still the subject of consultation;
• new Regulations which apply to payments made under term subordinated notes on or after 1 July 2001. The Regulations will allow debt tax treatment of certain term subordinated notes by ensuring that certain clauses relating to solvency and capital adequacy do not preclude those notes being considered as debt interests for the purposes of the debt/equity rules;
• draft legislation is now available for Taxation of Financial Arrangements (TOFA) reforms.