HMRC has published a policy paper outlining amendments to provide double taxation relief in respect of the UK bank levy and contributions made to the EU single resolution fund, to avoid the UK’s largest banks being taxed twice
Since 1 January 2015 all EU member states have been bound by the bank and resolution directive (BRRD). One of the key elements of the BRRD is the establishment of a new levy in Eurozone states to fund a single resolution fund.
The UK is satisfying its obligations under the directive by raising contributions through its existing levy on banks’ balance sheet liabilities. In some circumstances the single resolution fund levy overlaps with the UK bank levy and gives rise to instances of double taxation.
The policy paper outlines the measure which will give relief for instances of double taxation between the UK bank levy and the single resolution fund levy following its introduction. The relief is effective from 1 January 2016.
This measure will be made by statutory instrument using the power to make regulations within paragraph 67 of schedule 19 to the Finance Act 2011.
HMRC says this measure will only affect a small number of banking businesses with liabilities in excess of £20bn which are UK groups operating in the Eurozone through a subsidiary, or Eurozone banks operating in the UK through a permanent establishment.
HMRC’s policy paper, Bank levy double taxation relief (single resolution fund levy), is here.
