Bank levy
Produced in partnership with Charlotte Sallabank of Katten Muchin Rosenman UK LLP
Bank levy

The following Tax practice note Produced in partnership with Charlotte Sallabank of Katten Muchin Rosenman UK LLP provides comprehensive and up to date legal information covering:

  • Bank levy
  • Structure of this Practice Note
  • Background and policy objectives
  • Legislation and guidance
  • What entities are subject to the bank levy?
  • What is a relevant group?
  • What is a relevant entity?
  • Calculation of the bank levy
  • Step 1
  • Step 2
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

STOP PRESS: In relation to chargeable periods ending on or after 1 January 2021, the Bank Levy (Loss Absorbing Instruments) Regulations 2020, SI 2020/1188, provide a deduction from a UK entity’s equity and liabilities for the bank levy where it holds assets representing loss absorbing instruments issued by overseas subsidiaries to meet regulatory requirements.

The bank levy is a tax that:

  1. applies in respect of periods of account (defined in the legislation as chargeable periods) ending on or after 1 January 2011, and

  2. is charged on certain types of equity and liabilities (defined in the legislation as chargeable equity and liabilities) as at the end of a chargeable period of banks, building societies and groups containing banks and building societies

It is a balance sheet tax, not a tax on bank profits and the first £20bn of chargeable equity and liabilities is not

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