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HMRC internal manual

Bank Levy Manual

Double Taxation Relief: Single Resolution Fund: how relief is given

Claims – Regulations 9 and 10 of SI 2016/1212

Relief can only be given for any relevant Single Resolution Fund levy following a claim. As the amount of bank levy chargeable is returned on the normal company Self Assessment return the normal rules relating to claims under Corporation Tax Self Assessment apply.

The claim must be made by the responsible member of the group or by the relevant entity (see BKLM441000).

The claim is limited to the lesser amount of the UK bank levy (that is the UK bank levy can only be reduced to £nil) or the amount of Single Resolution Fund levy attributable to the balance sheets within the scope of the UK bank levy.

Relief will only be final once the Single Resolution Fund levy has been paid, however as the final Single Resolution Fund payment amount will not be known at the time the bank levy computation is due to be submitted to HMRC provisional relief may be claimed in line with the guidance for loan relationships at INTM167170.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Payments to the Single Resolution Fund

Contributions to the Single Resolution Fund Levy can be both made and calculated in a variety of ways.  Different applications will also apply in different member states of the EU.

BRRD components of the Single Resolution Fund Levy

Contributions to the Single Resolution Fund, over the transitional period to 2024, may also include contributions calculated by reference to contributions to national financing arrangements under Articles 102 and 103 of the Banking Resolution and Recovery Directive (2014/59/EU).

These individual contributions that are calculated by reference to contributions to national financing arrangements are collected by domestic authorities of the member state and then transferred to the Single Resolution Fund, rather than being paid directly by the bank.

Both individual contributions by banks that are calculated by the European Single Resolution Fund and those that are calculated by reference to contributions to national financing arrangements are treated as the individual contributions within Article 69 or 70 of the SRM Regulation (EU) No 806/2014 for the purposes of The Bank Levy (Double Taxation Relief) (Single Resolution Fund Levy) Regulations.

Irrevocable payment commitments

Contributions to the Single Resolution Fund can be made either by direct payment or by a collateral backed irrevocable payment commitment.  For the purposes of The Bank Levy (Double Taxation Relief) (Single Resolution Fund Levy) Regulations both the making of a cash payment and an irrevocable payment commitment would be considered “payment” of the Single Resolution Fund levy.

Time limit for making a claim – Regulation 9 of SI 2016/1212

A claim for relief must be made within 4 years of the end of the accounting period for which the bank levy is chargeable.  Alternatively, where the Single Resolution Fund levy is paid later than this, a claim may be made up to 12 months after the Single Resolution Fund levy has been paid.

Example

The responsible member returns a bank levy amount of 100 for the accounting period ended 31 December 2016.  Credit for any double taxation relief can be claimed until 31 December 2020.

Thereafter on 17 March 2020 the EU resident parent company pays an extra 80 of Single Resolution Fund levy of which 30 relates to the UK sub-group. The responsible member then has until 17 March 2021 to claim any extra relief.

Exchange rates – Regulation 8 of SI 2016/1212

Normally the bank levy and the Single Resolution Fund levy will be in different currencies. The exchange rate to be used is the spot rate of exchange for the last day of the chargeable period in relation to which credit is claimed.

The source of the spot rate is not defined. You should accept any reasonable rate such as that shown on the Bank of England website.