UK: The Current Tax Treatment Of Instruments Designed To Be Compliant With CRD IV


On 26 June 2012 HMRC published a paper on their website entitled 'The current tax treatment of Instruments designed to be compliant with Capital Requirements Directive 4' (the HMRC Paper). The HMRC Paper represents the latest stage in a series of published statements by HMRC following a public consultation in 2011 on the UK tax treatment of regulatory capital instruments designed to be compatible with the European Union's proposed Capital Requirements Directive IV (CRD IV) and the draft EU Capital Requirements Regulation (CRR). This article sets the HMRC paper in the context of current regulatory developments and considers the comments made in the HMRC Paper.

Regulatory developments

CRD IV is the package of measures through which EU implementation will take place of the Basel III reforms proposed by the Basel Committee on Banking Supervision (BCBS) which aim to strengthen the regulatory regime applying to EU credit institutions following the crisis in financial markets in 2007 and 2008. The Basel III proposals are a package of new standards which are scheduled to come into force on 1 January 20131 and, based on the European Commission's timetable, are expected to be introduced during a transitional period extending until 2021. The Basel III proposals will be implemented into EU law though changes to the existing Capital Requirements Directive which came into force on 1 January 20072. The proposed package of changes, generally referred to as CRD IV, is to be introduced through an EU Regulation, namely the CRR (published on 20 July 2011 and establishing the prudential requirements institutions need to adhere to), as well as an EU Directive (governing the access to deposit taking activities to be introduced through national law).3

The Basel III reforms propose, among other things, that banks and credit institutions should enhance the quantity and quality of capital, the latter requirement to be achieved through stricter definitions of core and non-core Tier 1 capital. Banks will be required to hold an increased percentage of their capital as Tier 1 capital (which is the highest quality of capital), comprising common equity Tier 1 and Additional Tier 1 capital. The increase in capital retention and quality is intended to assist with preventing weaknesses which were identified in bank capital retention during the recent financial crisis, thereby contributing to market confidence and continuing access to liquidity.

Capital requirements

Part 1 of the CRR (mirroring the Basel III proposals) sets out the qualifying elements that comprise Tier 1 capital and Tier 2 capital.4

Tier 1 capital constitutes 'going concern' capital, allowing an institution to continue its business and help prevent insolvency. It comprises common equity Tier 1 (namely ordinary shares subject to a series of detailed conditions to ensure that common equity Tier 1 constitutes the most subordinated interests in the institution) and Additional Tier 1 capital. Under the CRR5, Additional Tier 1 capital must also satisfy the same conditions as common equity Tier 1, including:

  • the instrument must be perpetual, and includes no incentive for the issuer to redeem (such as an interest 'step-up' or other incentive);
  • the instrument must be subordinated to general creditors, depositors and subordinated debt of the bank;
  • the instrument may be callable by the issuer only, and then only after a minimum of five years after issue with prior supervisory consent and must be replaced with capital of the same or better quality;
  • distributions (namely interest) on the instrument must be fully discretionary (subject to cancellation at the discretion of the issuer) and non-cumulative; and
  • the instrument must have principal loss absorbency either through conversion into common shares at an objective, pre-specified trigger (such as where the common equity Tier 1 capital ratio of the institution is passed) or a write-down mechanism which allocates losses to the principal amount of the instrument at a pre-specified trigger. 6 The key requirement is that the fixed trigger point should be passed at a going concern, rather than at a point of the institution's resolution, and should result in the reduction of the claim on such an instrument in liquidation or upon exercise of a call option.

Tier 2 capital under the CRR is 'gone concern' capital which helps ensure that depositors and senior creditors can be repaid if the institution fails7. It comprises those instruments that do not fulfil all of the Tier 1 capital requirements but contains conditions which include subordination to all general creditors and depositors and conditions that the instruments:

  • are unsecured;
  • have a minimum original maturity of at least five years; and
  • may be callable by the issuer only, and then only five years or more after issue. Issuers may not create any expectation that such a call may be exercised.

Furthermore, the terms of both Additional Tier 1 and Tier 2 instruments should include a requirement of being permanently written down or converted into common equity Tier 1 capital at the point of non-viability (PONV) of the issuer8. This is a different trigger to the 'going concern' trigger, being a write-down triggered at the discretion of a national regulator as opposed to a fixed pre-defined trigger passed by the institution as a going concern. The 'contractual bail in' feature of the PONV trigger will be common to Additional Tier 1 and Tier 2 capital instruments, with write down or conversion taking place either on the basis of the contractual terms of the instrument or through the use of a statutory power at the appropriate time.

HMRC consultation 2011

UK issuances of 'innovative' Tier 1 and Tier 2 instruments in the form of debt which were made before the adoption of the Basel III reform package by the BCBS generally enjoyed tax deductions for interest paid to investors. Although these capital instruments contained certain regulatory features which created problems in obtaining tax deductibility for interest costs, the market had adopted a number of solutions to those difficulties.9 Furthermore, the availability of tax deductions for interest coupons on innovative Tier 1 capital was frequently confirmed by HMRC through written clearances.

However, the requirements of the CRR create new tensions for the tax treatment of Additional Tier 1 and Tier 2 capital instruments. HMRC appear to have recognised the potential for these tensions from an early stage in the regulatory development of the Basel III and CRD IV proposals10, announcing a public consultation on the UK tax treatment of instruments designed to be compliant with CRD IV in the March 2011 Budget. The public consultation organised by HMRC during 2011 involved a series of meetings between representatives of HMRC, HM Treasury, financial institutions and tax professionals. At the end of the consultation, HMRC published their initial views in two discussion papers in August 2011 on the UK tax treatment of instruments designed to qualify as regulatory capital instruments for Additional Tier 1 and Tier 2 purposes. HMRC committed to give further updates 'in the near future'; the HMRC Paper provides that update.

HMRC Paper, published 26 June 2012

The HMRC Paper sets out HMRC's view under current law on a number of UK tax issues relevant to regulatory capital instruments, in particular on:

  1. the nature of perpetual capital instruments when considered in a UK tax context; and
  2. the application of the 'special securities' legislation in s1000(1)F and s1015(4) of the Corporation Tax Act 2010 (CTA 2010) to regulatory capital instruments in the context of whether this legislation could result in the recharacterisation of interest payments and other amounts into non-deductible distributions for UK tax purposes.

It should be noted that the application of the HMRC Paper is limited. HMRC have stated that the views expressed in the HMRC Paper will not change the existing tax treatment for any perpetual regulatory capital instruments issued before 26 June 2012. Furthermore, the HMRC Paper will not affect regulatory capital instruments issued following the introduction of the new CRD IV regime through the CRR. The clear intention of HMRC appears to be that regulations will be introduced under the power in s221 of the Finance Act 2012 (FA 2012) to govern the UK tax treatment of regulatory capital instruments after the date of introduction of the CRR. The instruments which would be affected by the HMRC Paper will therefore be instruments designed to comply with the reforms set out in CRD IV and the CRR, that is, instruments issued on or after 26 June 2012 but issued prior to the coming into effect of any statutory instrument made under the powers contained in s221 FA 2012.

'Perpetual' debt

The HMRC Paper distinguishes between 'truly perpetual debt' and 'contingent perpetual debt'.

  • Instruments which are 'truly perpetual' are described by HMRC as being instruments where the holder has 'no right to any repayment in any circumstances'.11 HMRC's stated view is that 'Additional Tier 1 instruments must be truly perpetual in that the holder of an Additional Tier 1 instrument has no right to repayment of the principal'.12 The scope of HMRC's description of 'truly perpetual' instruments giving 'no right to any repayment in any circumstances' appears to preclude the inclusion of perpetual instruments containing an issuer call right, as the issuer's exercise of such a call right would result in a debt due to the holder of that instrument.13
  • 'Contingent perpetual debt' is described by HMRC as a perpetual instrument where the right to repayment only arises as a result of a contractual clause providing for the return of principal on the occurrence of a contingent event, provided that the sum to be repaid on the contingency occurring is ascertainable at the time of issue of the instrument.14 In para 2.1 of the HMRC Paper, HMRC identify 'contingent perpetual' debt as being debt which includes a contractual clause 'providing for the return of principal in the event of a liquidation'.

    Contingencies other than a contractual liquidation clause in respect of a determined sum would, HMRC state, need to be considered on a case-by-case basis. However, the scope of instruments which should fall within the description of 'contingent perpetual debt' should be wider than just those instruments only containing a contractual liquidation clause (and no other contractual provision providing the holder with a right to repayment). For example, an issuer may have the right to call a capital instrument in the event of a change in law (including a change in tax treatment of interest payments under the instrument). The occurrence of that contingent event should permit the holder of that instrument to receive a sum which is ascertainable under the terms of the instrument. Such a right of repayment should not prevent such an instrument being 'contingent perpetual debt' using HMRC's own terminology.

Having defined 'truly perpetual' capital instruments, HMRC state that a 'truly perpetual' Additional Tier 1 instrument cannot be a debt and therefore cannot be a 'money debt' for the purposes of the loan relationships regime in Parts 5 and 6 of the Corporation Tax Act 2009 (CTA 2009). The key factor in HMRC's reasoning appears to be the absence of an 'obligation' on the issuer to repay principal. This factor is also evident in HMRC's argument that a 'truly perpetual' capital instrument cannot constitute an alternative finance arrangement under s501 CTA 2009 or an alternative finance investment bond under s507 CTA 2009.

'Truly perpetual' instruments would appear, on HMRC's definition, to exclude instruments where holders have a claim in respect of the principal of the instrument on a liquidation. Such a feature is, nevertheless, invariably seen in historic 'innovative' Tier 1 issuances. If the inclusion of a contractual liquidation clause providing for a return of principal in a determined sum results in an instrument being a 'contingent perpetual' instrument (as indicated in the HMRC Paper), it is possible that the class of instruments falling to be 'truly perpetual' would be very small, if existing at all. Deprived of a call right, holders of a perpetual capital instrument would expect their principal to be returned on a liquidation of the issuer after repayment of senior, or non-Tier 1, debt and subject to the Additional Tier 1's loss absorbency. Indeed, it is hard to envisage any regulatory capital issuance being marketed successfully without such a provision.

Consequently, it is tempting to view Additional Tier 1 instruments as falling closer to the 'contingent perpetual instrument' class, albeit as instruments that otherwise offer the holder no right to repayment of the principal prior to the relevant contingency arising.15

Results dependency

Consideration of whether an Additional Tier 1 instrument is a loan relationship will be of materially reduced importance if the interest payments under the instrument are capable of recharacterisation as non-tax deductible distributions. The possibility of such a recharacterisation is considered in the HMRC Paper given the various conversion and write-down features which are likely to be present in CRD IV compliant instruments.

In two papers published in 2011 as part of the public consultation process mentioned above, HMRC concluded that interest payments in respect of CRD IV Additional Tier 1 instruments were, based on the criteria for such instruments set down in the July 2011 CRD IV publication, 'likely to be results dependent' in the context of the rules for 'special securities' and in particular that the 'results dependent' provisions of s1015(4) CTA 2010 applied. 16 The provisions of s1015(4) CTA 2010 provide that interest payments are recharacterised as a non-deductible distribution if under the securities the consideration given by the company for the use of the principal secured depends to any extent on the results of the company's business or any part of the company's business. In HMRC's view, this test would need to be considered in the context of both the terms of the regulatory capital instruments themselves and also, in the phrase of HMRC, the 'external contingencies' affecting those terms.

The HMRC Paper amplifies the initial views of HMRC given in August 2011. HMRC provide some analysis of what they consider to be the 'heart of s1015(4)', and thereby the justification for their view that the interest payments on an Additional Tier 1 instrument would not be deductible for tax purposes. The issues surrounding s1015(4) CTA 2010 have been considered extensively by HMRC and tax practitioners for many years. To an extent the HMRC views on the provision are therefore reasonably well known, not least through the various non-statutory clearances obtained from HMRC in the context of issuances of innovative Tier 1 capital instruments in the current regulatory regime, ie the regime which preceded CRD IV, and through guidance published by HMRC.17

In the HMRC Paper, emphasis is given to the part of the provision whereby consideration given for the use of the principal secured 'depends (to any extent) on the results of a company's business'.

Interpreting this phrase, HMRC conclude that a key issue is the degree to which external contingencies (such as those arising from the CRD IV regulatory reforms) affect the terms of the instruments in question. HMRC's view (perhaps unsurprisingly) is that the results dependency of an instrument should not be judged merely by reference to the terms of the instrument and how these terms allow for a variation in consideration. This view rejects the argument that the legislative words 'under the securities' limit the examination for the purposes of s1015(4) to the terms of the relevant instruments viewed in isolation. Also unsurprising (and welcome) is the view by HMRC that results dependency should not be viewed by reference to every possible circumstance, however remote.

The 'better interpretation' supported by HMRC is that the external contingencies relevant for s1015(4) CTA 2010 should be those which exist or are 'at least considered likely to exist at the time of the instrument'. A 'direct or indirect causal connection' is required between the results of the issuer's business and the potential variation in consideration given for the principal. This requires an examination of what circumstances were in the issuer's contemplation, or perhaps more practically speaking the contemplation of the board of directors of the issuer, at the time of issuance of the capital instrument under examination. It also requires a wider examination than the mere contractual terms of the instruments themselves.

HMRC acknowledge that their preferred approach may be challenging in some circumstances, precluding the identification of a clear threshold for results dependency. HMRC instead prefer to consider the circumstances on a case-by-case basis, impliedly acknowledging that some form of informal clearance, or at least discussion, will be necessary regarding the tax attributes of regulatory capital instruments.

HMRC do, however, go on to discuss their approach in the context of external contingencies which should feature when the CRD IV regime is finalised:

  1. An instrument is unlikely to be regarded as carrying results-dependent interest where it has no express contractual reference to a statutory 'bail in' regime or implied term to be written down or converted to common equity Tier 1, notwithstanding that the instrument remains subject to a statutory 'bail in' regime which may require such a write down or conversion. An instrument of this nature would lack the contractual term linking the consideration provided to the lender and the statutory requirements of the 'bail in' regime. On such a statutory 'bail in' regime coming into effect in a manner which is linked to the results of the issuer's business, HMRC's view is that an instrument covered by such a regime is 'likely' to be results dependent, even where the terms of the instrument are silent as regards how the instrument performs under that regime.

    It is considered that the stated views of HMRC in this context are, however, difficult to reconcile. HMRC's treatment of interest on an instrument as not being results dependent where that instrument includes no express or implied term for contingent reduction is unsurprising; this treatment tends to imply a general approach of judging results depending at the point of issuance.18 It is difficult to reconcile that position with HMRC's views on the consequences of a statutory 'bail in' regime coming into effect, and leading to interest on a capital instrument becoming results dependent at the time of the regime's commencement.

    Such an approach arguably negates the importance in s1015(4) CTA 2010 of identifying the 'consideration given by the company for the use of the principal secured'. Where the 'consideration given' is the promise of the issuer to pay interest and other amounts to the lender, such a promise is made at the date of issuance of the instrument. That promise is aligned consistently with the securing of principal, an action which takes place at the date of issuance of the relevant instrument.

    An alternative, and preferred, approach to the consequences of a statutory 'bail in' regime coming into force (although not HMRC's stated view) would be that contractual terms in the instrument which expressly, or impliedly, permit a write down on certain external contingencies should not result in interest being results dependent as such contingencies would have been known when the promise of the issuer to pay interest was made at the date of issuance of the relevant instrument. Such an alternative approach would ensure that interest remains tax deductible even after any future date on which the instrument is subject to the statutory 'bail in' regime.

    Admittedly, such an alternative approach does not sit comfortably with HMRC's statement that 'external contingencies' relevant for consideration in the context of s1015(4) CTA 2010 include 'circumstances that exist or are at least considered likely to exist'. However, that statement is arguably too broad. On that criteria, taken literally, HMRC's own position that instruments containing no express or implied term referencing a statutory 'bail in' would not carry results-dependent interest would also appear inconsistent.
  2. If the contingency of an instrument being subject to a write down under a 'bail in' regime in the future is part of the contractual terms of the instrument, HMRC consider the interest coupon on such an instrument will be results dependent even if the statutory 'bail in' regime is not yet in force. This conclusion is based on HMRC's assumption that the 'bail in' regime would be linked to the results of the issuer's business, which admittedly seems probable. In such a situation the causal link between the terms of the 'bail in' regime, the results of the business and the consideration for the use of the principal would, in HMRC's view, be established.
  3. HMRC also considers that the discretionary and non-cumulative nature of the coupons on Additional Tier 1 instruments is a 'strong indicator' of the consideration on such instruments being results dependent under current law.

While the views of HMRC regarding s1015(4) CTA 2010 in the context of the CRD IV reforms are perhaps unsurprising, it remains unclear is the extent to which these views are also applicable in a non-regulatory context.

Other developments

HMRC have stated that the HMRC Paper does not deal with the tax treatment of regulatory capital instruments which may be issued under the final form of CRD IV and the CRR. The intention of HMRC would appear to be to publish regulations under the regulation-making power contained in s221 FA 2012 for consultation once the final terms of capital instruments under the CRR is clear. However, given the views expressed in the HMRC Paper and the uncertainty concerning other tax and accounting issues surrounding Additional Tier 1 and Tier 2 instruments under CRD IV, it is at least possible that the government may favour circumventing such issues with a regime which encompasses all non-core equity capital instruments and prescribing their tax treatment. Something similar has been achieved successfully in the context of the Taxation of Securitisation Companies Regulations 2006, SI 2006/3296, which forms a useful precedent in tax policy terms of what might be achieved for regulatory capital instruments.

Such a regime, prescribing tax deductibility for interest costs on Additional Tier 1 and Tier 2 instruments, would be consistent with the treatment afforded historically to innovative Tier 1 and Tier 2 instruments prior to CRD IV. The possibility of tax deductible Additional Tier 1 and Tier 2 instruments would prevent the UK from being out of step and uncompetitive when viewed against other EU member states offering tax deductibility for comparable instruments.

However, against this there is little comfort in the HMRC Paper that HMRC are persuaded of the technical argument as to why tax deductibility of Additional Tier 1 and Tier 2 instruments should be preserved for going concern and gone concern instruments.

Finally, the discussions concerning the tax treatment of regulatory capital instruments under CRD IV need to be placed in the general context of tax policy concerns regarding over-leverage in the European financial system and a perceived bias away from equity in favour of debt funding on technical grounds. It would not be completely surprising if, in balancing the relative needs of institutions, investors and the UK Exchequer, HMRC came to view that the tax deductibility of Additional Tier 1 and Tier 2 instruments following the finalisation of the CRR may be just as limited as the scope for tax deductibility for the regulatory capital instruments addressed in the HMRC Paper.


1. FSA statement regarding CRD IV implementation, 1 August 2012, which stated that 'it does not appear feasible that the [CRD IV] legislation can enter force in line with the implementation date of 1 January 2013'.

2. 2006/48/EC and 2006/49/EC.

3. CRD IV has been under discussion between the European Parliament, European Commission and Council of Ministers, with discussions originally being aimed at finalising an agreed position by the end of June 2012, enabling adoption by the European Parliament plenary in early July 2012. The timetable has slipped, and it is now clear that the legislation will not be adopted earlier than the autumn of 2012 (see FSA Statement 1 August 2012).

4. 'Innovative' Tier 1 capital, which has been allowed since 1998 up to a limit of 15% of total Tier 1 capital, will be phased out starting on 1 January 2013. Tier 3 capital has been abolished by the BCBS with no transitional provisions, although as Tier 3 consists of short-term subordinated debt (generally with a maturity of two years), such capital could be refinanced (subject to market conditions) before the Basel III and CRD IV reforms are implemented.

5. Article 49 of the CRR (Part I, Title II, Chapter 3, 'Additional Tier 1 Capital').

6. The nature of the write-down of the principal amount under art 49(1)(n) of the CRR is explored further in the EBA Consultation Paper on Draft Regulatory Standards on Own Funds (EBA/CP/2012/02, published 4 April 2012).

7. Article 59 of the CRR (Part I, Title II, Chapter 4, 'Tier 2 Capital').

8. The BCBS announced the requirement for a 'bailin' feature at the PONV on 13 January 2011, with this requirement applying to all capital instruments issued on or after 1 January 2013 ( Instruments issued prior to 1 January 2013 that did not contain such a 'bail-in' feature but which met all of the other criteria for Additional Tier 1 or Tier 2 capital set out in Basel III will be eligible for grandfathering for a limited period of time. There are a number of limited exceptions to the introduction of the 'bail in' requirement in capital instruments where national resolution regimes may deliver a write-down through statutory means. It is anticipated that very few jurisdictions will have a resolution regime achieving that result.

9. As regards 'direct issuances' of 'innovative' Tier 1 capital, the issuer would be able to defer scheduled interest payments if paying interest would cause the issuer's insolvency. The issuer was entitled to settle interest obligations through issuing shares under what was known as the 'alternative coupon satisfaction mechanism' (which will not operate in the same manner, if at all, under the Basel III criteria: June 2011 version of Basel III criteria, Part I, footnote 17 to para 55). As deferred interest remained payable on a winding-up of the issuer, HMRC accepted that mere delay in payment of interest would not result in the interest being recharacterised as a non-deductible distribution under the rules for results-dependent 'special securities' in s1015(4) of the Corporation Tax Act 2010. 'Indirect' issuances of 'innovative' Tier 1 capital though preferred interests in English, Jersey or Delaware partnerships also successfully achieved tax deductible interest coupons, but this structuring method is not effective following the Basel III reforms.

10. In a paper published on the HMRC website in May 2011, HMRC suggested that 'instruments reflecting the loss absorbency requirement [in CRD IV] may not be tax deductible under current rules'.

11. HMRC Paper, para 2.1, first bullet.

12. HMRC Paper, para 2.2.

13. This would be a surprising result, as the CRD IV proposals and CRR clearly contemplate the possibility that Additional Tier 1 instruments allow an issuer to call the instrument subject to obtaining regulatory consent (art 49(h) and (i) and art 72 of the CRR proposals; 2011/0202 (COD), Part I, Title I, Chapter 3, published 20 July 2011). The conclusion to be drawn is that the class of instruments falling within HMRC's description of being 'truly perpetual' would be very narrow indeed.

14. HMRC paper, para 2.1, second bullet and para 3.4.

15. It is noted, however, that viewing the class of 'truly' perpetual instruments as being very narrow cuts across HMRC's statement that '[u]nder the CRD IV criteria Additional Tier 1 instruments must be truly perpetual' (para 2.2 of the HMRC Paper), although it is considered that this statement by HMRC is an over-simplification.

16. Paragraph 29 of the HMRC letter to the Basel III Working Group on 'gone concern' capital, 4 August 2011 and para 23 of the HMRC letter to the Basel III Working Group on 'going concern' capital, 5 August 2011.

17. HMRC Company Taxation Manual paras CTM 15520 and CTM 15525.

18. An argument might be advanced that HMRC's position is itself inconsistent with their views of which 'external contingencies' are relevant for consideration in the context of s1015(4) CTA 2010. The HMRC Paper requires 'circumstances that exist or are at least considered likely to exist' to be taken into account; such circumstances arguably would encompass a statutory 'bail in' regime currently anticipated under CRD IV, notwithstanding that the terms of that regime are not yet finalised.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.