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HMRC internal manual

Bank Levy Manual

From
HM Revenue & Customs
Updated
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Double Taxation Relief: France: home state primacy

The bank levy applies to chargeable equity and liabilities reported in:

  • the global consolidated balance sheet of UK banking groups and building society groups
  • the aggregated UK sub-group and UK subsidiary balance sheets, together with a proportion (determined in accordance with these provisions) of the balance sheets of non-resident banks operating in the UK through permanent establishments and ‘relevant foreign banks’ (see BKLM245000) which are members of foreign banking groups, and
  • the balance sheets of certain banks (UK resident banks and relevant foreign banks) and UK banking sub-groups in non-banking groups - ‘relevant non-banking groups’ (see BKLM241000).

The bank levy also applies to the chargeable equity and liabilities reported in the balance sheets of single entities that are UK banks, called ‘UK resident banks’ (see BKLM243000), non-resident banks operating in the UK through permanent establishments, called ‘relevant foreign banks’ (see BKLM245000) and building societies that are not members of groups for a chargeable period, called ‘relevant entities’.

Under the principle of home state primacy the state of residence of the banking subsidiary or Permanent Establishment will give relief for any levy charged by the state of residence of the parent or head office.

For example, if a French bank trades in the UK via a Permanent Establishment (‘PE’), then the UK will give relief against the UK bank levy for the French bank levy charged upon the UK PE.

This can be contrasted with the situation for Corporation or Income Tax where normally France would give relief for any tax paid by the PE in the UK.