27(1)This paragraph applies for the purposes of Step 3 in paragraph 24(1).U.K.
(2)To determine the amount of the relevant foreign bank's [F1adjusted equity and liabilities] —
(a)determine the amount of the bank's equity and liabilities (other than excluded equity and liabilities) as at the end of the chargeable period,
(b)adjust that amount in accordance with sub-paragraph (5) and [F2paragraph 27D(1)] F3... (so far as applicable), and
(c)[F4finally (subject to sub-paragraph (6))] reduce that amount (but not below nil) by—
[F5(i)the amount of the entity’s high quality liquid assets as at the end of that period, other than—
(a)any asset which for the purposes of an adjustment under paragraph (b) is an asset to which paragraph 27D(1) applies;
(b)in a case where the bank levy is charged as provided for by paragraph 4 (groups), any asset to which paragraph 15U(1) applies for the purposes of adjusting the amount of the equity and liabilities of another member of the relevant group (see Step 2 in paragraph 15N(1)),] and
(ii)where sub-paragraph (4) applies, the amount determined under that sub-paragraph.
(3)Sub-paragraph (4) applies where—
(a)as at the end of the chargeable period, the assets of the relevant foreign bank include a financial asset in respect of an advance of cash made by the bank,
[F6(b)that financial asset is not an asset which—
(i)for the purposes of an adjustment under sub-paragraph (2)(b), is an asset to which paragraph 27D(1) applies, or
(ii)in a case where the bank levy is charged as provided for by paragraph 4 (groups), is an asset to which paragraph 15U(1) applies for the purposes of adjusting the amount of the equity and liabilities of another member of the relevant group under Step 2 in paragraph 15N(1),] and
(c)underlying that asset, as collateral, is an item (“the collateral”) owned by the bank which would form part of the bank's high quality liquid assets as at the end of that period were the collateral, rather than the financial asset, an asset of the bank.
(4)The amount within sub-paragraph (2)(c)(ii) is—
(a)the amount of the financial asset as at the end of that period or, if lower, an amount equal to the fair value of the collateral as at that time, or
(b)if this sub-paragraph applies in relation to more than one financial asset, the total of the amounts determined under paragraph (a) in respect of each of those assets.
(5) Where paragraph 24(1) is being applied in determining the UK allocated equity and liabilities of a relevant foreign bank for the purposes of [F7paragraph 15(2)(b)], the following liabilities are to be left out—
[F8(a)UK connected liabilities to a chargeable UK resident entity which is a member of the relevant group,
(b)UK connected liabilities to a UK sub-group of the relevant group, and
(c)UK connected liabilities to any other relevant foreign bank which is a member of the relevant group.]
[F9(5A)In sub-paragraph (5), references to “UK connected liabilities” have the same meaning as in paragraph 15R(2) (see paragraph 15R(3) to (5)).]
[F10(6)Where an amount (“A”) within sub-paragraph (2)(c) is used to reduce short term liabilities, the amount of the reduction is determined as if A were an amount equal to half of A.]
Textual Amendments
F1Words in Sch. 19 para. 27(2) substituted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(2)(a)
F2Words in Sch. 19 para. 27(2)(b) substituted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(2)(b)
F3Words in Sch. 19 para. 27(2)(b) omitted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by virtue of Finance Act 2018 (c. 3), Sch. 9 para. 17(2)
F4Words in Sch. 19 para. 27(2)(c) substituted (with effect in accordance with Sch. 26 para. 7 of the amending Act) by Finance Act 2014 (c. 26), Sch. 26 para. 6(a) (with Sch. 26 para. 13)
F5Sch. 19 para. 27(2)(c)(i) substituted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(2)(c)
F6Sch. 19 para. 27(3)(b) substituted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(3)
F7Words in Sch. 19 para. 27(5) substituted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(4)
F8Sch. 19 para. 27(5)(a)-(c) substituted for Sch. 19 para. 27(5)(a)(b) (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(5)
F9Sch. 19 para. 27(5A) inserted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 6(6)
F10Sch. 19 para. 27(6) substituted (with effect in accordance with Sch. 26 para. 7 of the amending Act) by Finance Act 2014 (c. 26), Sch. 26 para. 6(b) (with Sch. 26 para. 13)