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HMRC internal manual

Bank Levy Manual

Double Taxation Relief: Single Resolution Fund: Application

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’.

The Single Resolution Fund levy is not charged on a group basis in the same way as the bank levy. Instead contributions to the Single Resolution Fund are collected from each qualifying entity resident in the EU member state.

This means that in an EU member state where a bank must make contributions to the Single Resolution Fund those contributions are only made by entities resident in that state (and permanent establishments of entities resident outside the EU).

Relief for contributions made to the single resolution fund is allowed where the UK bank levy applies to EU resident entities that make contributions to the Single Resolution Fund. This will include EU resident subsidiaries of UK resident entities, and UK permanent establishments of EU resident banking entities.

The principle of giving primary rights to the state where the entity is resident is different to the principle of home state primacy that is used for the French Bank Levy (see BKLM740120).

Regulation 3(4) of SI 2016/1212

Relief for the Single Resolution Fund levy is given separately in relation to the imposition by the law of each foreign territory.

This means that calculations will need to be undertaken separately for each incidence of double taxation, once each for every time that the Single Resolution Fund levy is applied by Germany, Ireland, Spain etc.