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HMRC internal manual

Bank Levy Manual

Chargeable equity and liabilities: relevant entities and groups: relevant non-banking groups: joint ventures: held by foreign banking groups and relevant non-banking groups

Paragraph 43 of Schedule 19

Generally the liabilities of a JV will be charged to the bank levy either by virtue of being included within the financial statements of the venturer (proportional consolidation) or by treating the JV as a separate entity (where the venturer(s) account for the JV using the equity method). See BKLM323500 for further details.

The exception is where the JV is held by a foreign banking group or a relevant non-banking group, where the financial statements and aggregation process will not necessarily bring the JV liabilities within the bank levy.

Paragraph 43 ensures that JV liabilities within foreign banking groups (see BKLM241000) and relevant non-banking groups (see BKLM241000) are brought into the bank levy charge where:

  • a member of the relevant group has an interest in a JV
  • the relevant consolidated financial statements include an amount of liabilities representing the interest in the JV’s liabilities, and
  • none of the liabilities of any relevant foreign bank (see BKLM245000), any relevant UK sub-group or any other entity within the bank levy charge contain the JV’s liabilities.

In such cases paragraph 43(2)(a) requires the relevant group to determine its chargeable equity and liabilities on the basis that the JV is a member of the group, but only to the extent of the group’s interest in the JV’s assets and liabilities. Paragraph 43(2)(b) ensures that the JV is treated as if it were not a member of the group in relation to the remaining liabilities and assets.