The government announced plans to overhaul the UK Export Finance's (UKEF) Direct Lending Scheme that provides loans to overseas buyers of capital goods and services from UK exporters in circumstances where export finance is unavailable from commercial banks. The government will:

The government plans to work in partnership with banks to deliver the enhanced direct lending scheme and ensure that small companies can benefit from the scheme as well as mid-sized and large companies.

For more information on the Direct Lending Scheme, see Legal update, UK Export Finance launches direct lending scheme.

(See 2014 Budget Report, paragraphs 1.124 and 2.218.)

The government announced that the UKEF's Export Refinancing Facility (ERF) will commence operation by the end of April 2014. The facility is a modification of the UKEF's standard Buyer Credit Facility under which it guarantees loans made by banks to overseas buyers to fund the export of goods or services by UK businesses. The ERF essentially guarantees the refinancing of such loans in the debt capital markets.

The ERF will be available to banks funding non-sterling buyer credit loans that are intended to be refinanced in the debt capital markets. Under the facility, UKEF will provide:

The loan value must be the equivalent of at least £50 million in a debt capital markets non-sterling currency with a substantial investor base. The period for repayment of the loan must be at least five years.

(See 2014 Budget Report, paragraph 2.218 and UKEF: Export Refinancing Facility.)

The government announced a consultation to broaden the UKEF's powers and thereby increase access to trade finance for businesses. The consultation paper, published by the Export Credits Guarantee Department of the UKEF, proposes amendments to the Export and Investment Guarantees Act 1991, which sets out the UKEF's powers. The amendments include widening UKEF's powers so that it has:

The deadline for responses to the consultation is 16 April 2014. A Bill containing the proposed amendments is expected to be laid before Parliament in June 2014.

For information on some of the schemes offered by UKEF to support UK exports, see Practice note, Government finance initiatives: Government guarantee schemes and Infrastructure investment and credit support for UK exporters.

(See 2014 Budget Report, paragraphs 1.124 and 2.218 and UKEF Consultation: Support for UK exports: changes to the Export and Investment Guarantees Act (EIGA) 1991 (as amended).)

The government announced there will be a consultation on legislating to help match small and medium-sized enterprises (SMEs) who are turned down for a loan with alternative lenders, in order to broaden the sources of finance available to SMEs.

(See 2014 Budget Report, paragraphs 1.120 and 2.234.)

To encourage a more diverse banking sector and additionally support more bank lending to SMEs, the British Business Bank will issue a request for proposals to pilot its wholesale guarantees programme, which was announced in the 2013 Autumn Statement.

For background on the Business Bank, see Practice note, Government finance initiatives: Business Bank and for information on the 2013 Autumn Statement announcement, see Legal update, 2013 Autumn Statement: finance implications: Funding initiatives.

(See 2014 Budget Report, paragraphs 1.121 and 2.237.)

The government announced a new agreement by the major banks to process most claims for a deed of priority or waiver within seven working days, and for each bank to provide standardised documentation to simplify the process. The aim is to speed up the process for SMEs seeking finance from challenger banks or other alternative finance providers.

For a standard form deed of priority, see Standard document, Deed of priority. For a form of waiver request, see Standard document, Waiver request: borrower to lender. Both include integrated drafting notes which explain the law behind and commercial reasons for provisions of the document.

(See 2014 Budget Report, paragraph 2.236.)

As announced on 26 November 2013 (and taking effect from that date), the government will introduce legislation in the Finance Bill 2014 to amend a corporation tax rule on loan relationships to include cases where a debt is released as a result of the application of any of the stabilisation powers under Part 1 of the Banking Act 2009. For more information, see Legal update, Finance Bill 2014: implications for finance lawyers: Release of debts: financial institutions in resolution.

(See 2014 Budget Report, paragraph 2.238.)

The planning system in the UK is still considered to be cumbersome, expensive and bureaucratic. To address these issues the government is continuing with a number of measures to improve and streamline the planning system.

For more information, see Legal update, 2014 Budget: property implications: Planning reform.

In order to support SMEs' access to finance, the government has announced that it will create a £500 million Builders' Finance Fund. This will provide loans to developers to unlock 15,000 housing units that are currently awaiting development due to lack of finance.

For more information, see Legal update, 2014 Budget: key construction industry implications: Housing supply.

(See 2014 Budget Report, paragraphs 1.14 and 2.20.)

The government has announced the extension of its equity loan scheme. The scheme was introduced on 1 April 2013 as part of the government's measures to tackle problems in the housing market. Under the scheme the government will, among other things, provide prospective buyers with an equity loan worth up to 20% of the value of a new-build home, repayable once the home is sold. The scheme will be extended beyond its original three year term to March 2020. The government is also considering extending the scope of the scheme to those building their own homes.

For background information on the scheme, see Legal update, 2013 Budget: property implications: Help to Buy: Equity loan scheme.

(See 2014 Budget Report, paragraphs 1.140, 1.142 and 2.15.)

The government announced that it will use the Finance Bill 2014 to amend legislation to ensure that regulations can be made to set out the tax treatment of capital instruments that are compliant with the Solvency II Directive (2009/138/EC) (Solvency II). Subject to moves by the Organisation for Economic Co-operation and Development, the government will make regulations to ensure that insurers' Solvency II instruments that are issued in the form of debt are taxed as debt instruments, as the tax treatment of these instruments is uncertain.

For background information, see Practice note, Project bonds: Solvency II.

(See 2014 Budget Report, paragraph 2.131.)

As announced in the 2013 Budget, the government will abolish the stamp duty reserve tax (SDRT) charge on unit trusts and open-ended investment companies in Schedule 19 to the Finance Act 1999. These changes will have effect from 30 March 2014. Also, as previously announced, the government will abolish stamp taxes and SDRT on shares in companies quoted on recognised growth markets (such as the Alternative Investment Market).

For more information, see Legal update, 2014 Budget: key business tax announcements: SDRT: abolition on dealings in unit trusts and OEICs.

For background, see Legal update, 2013 Budget: implications for finance lawyers: Stamp duty on shares and units.

(See 2014 Budget Report, paragraph 2.128.)

In 2013 the government reviewed the operational efficiency of the bank levy. Following this review the 2014 Budget included various announcements relating to the future of bank levy.

For more information, see Legal update, 2014 Budget: key business tax announcements: Bank levy banding.

For background on the bank levy, see Practice note, Bank levy.

The government has published an updated list of those banks that have unconditionally adopted the enhanced Code of Practice on Taxation for Banks. As previously announced, legislation included in the Finance Bill 2014 will provide for HM Revenue & Customs (HMRC) to publish (from 2015) an annual report on the operation of the Code.

For more information, see Legal update, 2014 Budget: key business tax announcements: Code of Practice on taxation for banks.

For background, see Legal update, 2013 Autumn Statement: finance implications: Code of Practice on Taxation for Banks.

(See 2014 Budget Report, paragraph 2.123 and HMRC: Banks that have adopted the banking Code of Practice.)

The 2014 Budget confirmed that the Finance Bill 2014 is to contain certain changes to the worldwide debt cap legislation on which the government has previously consulted. For more information on these measures, see Legal update, 2014 Budget: key business tax announcements: Anti-avoidance.

For background, see Legal updates, 2013 Budget: implications for finance lawyers: Debt cap: group treasury companies and 2013 Autumn Statement: finance implications: Debt cap rules: updated provisions.

(See 2014 Budget Report, paragraph 2.117.)

In the 2013 Autumn Statement, the government announced a new draft section 695A of the Corporation Tax Act 2009 (CTA 2009) to tackle tax avoidance schemes that use derivatives (typically, total return swaps) to effect an intra-group transfer of profits in order to escape corporation tax liability. Section 695A is to be introduced in the Finance Bill 2014.

In order to prevent avoidance schemes from circumventing section 695A by using arrangements other than derivatives, the government introduced a new section 1305A of CTA 2009 in the 2014 Budget, with immediate effect. Section 1035A provides that where, for the purposes of tax avoidance, there is an intra-group transfer of all or a significant part of a company's profits, either directly or indirectly, the company will be assessed for corporation tax as though the transfer had not taken place.

The government published guidance on section 1035A, which considers various arrangements that may fall within its scope, including loan facilities and securitisations. Furthermore, section 1035A may apply to profit transfers involving derivatives even if section 695A does not apply because of the exclusion in section 695A(1)(e).

For more information, see Legal update, 2014 Budget: key business tax announcements: Avoidance schemes involving the transfer of corporate profits.

For background, see Legal update, 2013 Autumn Statement: finance implications: Tax avoidance: total return swaps linked to company profits. For information on derivatives generally and total return swaps in particular, see Practice notes, Derivatives: overview (UK) and Equity derivatives: overview (UK): Total return swaps.

(See 2014 Budget Report, paragraphs 1.205, 2.198 and 2.199, TIIN, Avoidance schemes involving the transfer of profits and HMRC: Guidance on avoidance schemes involving the transfer of corporate profits: Technical Note.)

The government confirmed that the Finance Bill 2014 will include the following legislation, some of which was previously announced:

Legislation to clarify and rationalise the taxation of loan relationships and derivative contracts held by a partnership will now be deferred to 2015 and will not be included in the Finance Bill 2014.

For more information, see Legal update, 2014 Budget, key business tax announcements: Reform of corporate debt and derivatives rules.

For background, see Legal update, 2013 Autumn Statement: finance implications: Taxation of corporate debt and derivative contracts. For information on the taxation of derivatives generally, see Practice note, Derivatives: tax.

(See 2014 Budget Report, paragraph 2.130 and TIIN, Modernising the taxation of corporate debt and derivative contracts.)

Since the 2012 Budget, the government has introduced a package of tax measures aimed at high value residential properties held by certain non-natural persons (NNPs). The government's main concern was that high value residential properties were being held by NNPs as a method of avoiding charges to tax especially stamp duty land tax (SDLT).

The current measures apply to residential properties valued over £2 million and include:

Due to the success of these measures the government has now announced that it intends to extend them to two further bands of property, to those valued at:

The SDLT rate of 15% on the acquisition of properties by an NNP will apply to both Band 1 and Band 2 properties from 20 March 2014. The ATED and the related CGT charge will be charged to properties in Band 2 from April 2015 and to Band 1 from April 2016.

For more information, see Legal update, 2014 Budget: property implications: High value UK residential property held by non-natural persons.

For background on the taxation of enveloped residential property see Practice note, Capital gains tax charge relating to annual tax on enveloped dwellings (ATED).

(See 2014 Budget Report, paragraphs 1.192-1.195 and 2.182-184 and TIIN, Taxation of high value UK residential property held by certain non-natural persons.)

The government confirmed that, as previously announced, the Finance Bill 2014 will include legislation to widen the scope of section 363A of the Taxation (International and Other Provisions) Act 2010. The current provisions treat offshore funds that are undertakings for collective investment in transferable securities as not being resident in the UK if they are resident in another European Member State for the purposes of any tax imposed under the law of that state on income. Following a consultation period, it is intended that section 363A will be amended to include alternative investment funds from 5 December 2013.

For more information, see Legal update, 2014 Budget: key business tax announcements: Corporate tax.

(See 2014 Budget Report, paragraph 2.126.)