Paragraph 47 of Schedule 19
The bank levy legislation includes an anti-avoidance measure, to counter the ability of banks to avoid or reduce a liability to the bank levy through avoidance.
The measure comprises a two-part test, both of which must be satisfied for the anti-avoidance rule to apply:
- one or more entities must have entered into arrangements, and
- the main purpose, or one of the main purposes of any entity, in entering into the arrangements or any part of the arrangements, is to avoid or reduce a charge or assessment to the bank levy.
Where this test is met, the bank levy will be charged or assessed with any reduction in a charge or assessment as a result of the arrangements ignored.
The bank levy legislation seeks to encourage banks to adopt lower risk funding strategies. The anti-avoidance rule will not apply to arrangements where their effect is to comply with this policy aim. The legislation therefore includes exemptions for arrangements to the extent that they have this specified effect.