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HMRC internal manual

Bank Levy Manual

Anti-avoidance: relevant arrangements that can be ignored when applying the anti-avoidance rule: increases in high quality liquid assets

Paragraph 47(12) of Schedule 19

The bank levy legislation allows relevant groups and relevant entities, in certain circumstances, to reduce the amount of chargeable liabilities to the extent of their holdings in high quality liquid assets (BKLM360000).

As this reflects a policy of encouraging banks to hold less risky, highly liquid assets, the anti-avoidance rule does not apply to relevant arrangements, so far as their effect is to increase, on an ongoing basis, high quality liquid assets of the relevant group or relevant entity.

Whether an increase is on an ongoing basis will be considered in the context of the bank or group’s profile over a period of time. ‘Window dressing’ to achieve a short term effect around the balance sheet date will not generally be considered to be on an ongoing basis.

Other effects of relevant arrangements are not ignored, unless an exception applies - see BKLM641000.