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HMRC internal manual

Bank Levy Manual

Double Taxation Relief: powers to provide relief

The UK’s tax treaty network generally provides double taxation relief where income or gains are taxed in both the country where they arise and the country where the recipient is resident. However, bank levy liabilities are not covered within our existing tax treaties, and as such these treaties do not allow for double taxation arising in respect of the bank levy to be relieved.

Paragraphs 66 and 67 of Schedule 19

To address this issue the bank levy legislation includes powers to give effect to arrangements to alleviate double levy charges or to introduce regulations providing for double levy relief. This allows any treaty or understanding (for instance an exchange of letter between the UK and another country) that intends to relieve double levy charges to be given legal effect as a matter of UK domestic law so that relief can be provided against the bank levy.

The rules allow for these powers to give effect to such arrangements to provide relief from the bank levy retrospectively and for information to be disclosed to an authorised officer of the authorities of a foreign territory to enable the correct amount of relief to be given.