BKLM740370 - Double Taxation Relief: Single Resolution Fund: which balance sheet?

The bank levy is based upon liabilities that arise in the balance sheet for the chargeable period in question. This means that the bank levy will arise on a current year basis, with for example the balance sheet for 31 December 2020 giving rise to the bank levy for the chargeable period ending 31 December 2020.

However, the Single Resolution Fund levy is based upon the balance sheet of the last audited accounts available 12 months preceding the point at which the charge arises. This will usually mean that the Single Resolution Fund levy will be based on the balance sheet two years previous to the year in which the charge arises.

Using the same dates as above, this means that the balance sheet for 31 December 2020 will be used to compute the Single Resolution Fund liability arising for the chargeable period ending 31 December 2022.

In order to qualify for relief an equivalent foreign levy must (amongst other things – see BKLM730000) arise from the balance sheet. For there to be double taxation this means that the foreign levy must arise in respect of the same balance sheet that gave rise to the bank levy charge.

So in our example the bank levy for 31 December 2020 (which arises from the balance sheet at 31 December 2020) will be reduced by the credit arising from the Single Resolution Fund levy calculated by reference to the same balance sheet at 31 December 2020.

In practical terms this means that when calculating the amount of relief due, the balance sheet by which the Single Resolution Fund levy charge has been calculated must be for the same period as the chargeable period as the balance sheet which has been charged to the bank levy to determine the maximum amount of the equivalent foreign levy.

Provisional claims

As the 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)