SCHEDULES

SCHEDULE 19The bank levy

Part 4Chargeable equity and liabilities

F1Designated FPE entities: non-UK allocated equity and liabilities etc

Annotations:
Amendments (Textual)
F1

Sch. 19 paras. 15-15Z5 and cross-headings substituted for Sch. 19 paras. 15-23 (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 2

15Z2

1

This paragraph applies for the purposes of Step 2 in paragraph 15Z1.

2

The assets of the foreign permanent establishment are those which it would have were it a distinct and separate enterprise which—

a

engaged in the same or similar activities under the same or similar conditions, and

b

dealt wholly independently with the designated FPE entity.

3

For the purposes of paragraph 15Z1 and this paragraph, any relevant provisions of Chapter 3A of Part 2 of CTA 2009 (UK resident companies: profits of foreign permanent establishments) are to be applied as they would be applied in determining profits attributable to the foreign permanent establishment for corporation tax purposes.

4

But in determining the non-UK allocated equity and liabilities attributable to a foreign permanent establishment of a designated FPE entity which is a member of the relevant group, any assets within sub-paragraph (5) are to be left out.

5

The assets within this sub-paragraph are any assets of the foreign permanent establishment (as otherwise determined under this paragraph) representing an excluded loan relationship.

6

A loan relationship is “excluded” if—

a

the designated FPE entity mentioned in sub-paragraph (4) is the creditor,

b

the debtor (“D”) is a UK resident bank, a building society or a relevant foreign bank—

i

which is a member of the relevant group, and

ii

whose activities include the relevant regulated activity described in the provision mentioned in paragraph 79(a),

c

the money which is the subject of the transaction giving rise to D’s debt is money borrowed by the designated FPE entity mentioned in sub-paragraph (4) from another entity, and

d

in borrowing that money the designated FPE entity was acting as the agent or intermediary of D.

7

Section 302(1) of CTA 2009 (definition of “loan relationship”) applies for the purposes of sub-paragraphs (5) and (6) as it applies for corporation tax purposes.