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HMRC internal manual

Bank Levy Manual

HM Revenue & Customs
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Anti-avoidance: the purpose test

Paragraph 47(1) of Schedule 19

In order for the bank levy anti-avoidance rule to apply, both elements of a two-part test must be satisfied.

Part 1: Arrangements are entered into by one or more entities

It is intended that ‘arrangements’ will be interpreted widely, to include any arrangements whether or not legally enforceable, including a single transaction or more than one transaction.

Part 2: 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.

Arrangements may have more than one main purpose, and different entities may have different main purposes when entering into the same arrangements.

Subject to exceptions (see BKLM641000), the anti-avoidance rule will apply wherever, in entering into any part of the arrangements, any entity had a main purpose of avoiding or reducing a charge or assessment to the bank levy.