UK and International Tax news

Bank Levy And DTR

Wednesday 3rd August 2011

HMRC have recently published draft regulations which aim to give double tax relief [DTR] to those French banking entities and groups in the UK which are subject to both the UK bank levy and the French bank levy.

The regulations appear to provide for a credit for the amount of the equivalent French bank levy paid against the UK liability although it is far from clear whether there is logic or consistency in the approach given the UK bank levy applies to relevant liabilities of the balance sheet of the UK entity, whilst the French bank levy applies to assets. In particular, the regulations will restrict the DTR available by referring chargeable equity and liabilities of the relevant entity or group which are UK assets to the equivalent French levy in respect of which credit is to be given.  It is not clear how liabilities can also be assets.

HMRC have requested comments on the draft regulations before their finalisation.

If you would like further information on the above, please contact Keith Rushen on 0044 (0)20 7486 2378.

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