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BKLM360000 | Chargeable equity and liabilities: high quality liquid assets

From HM Revenue & Customs · Bank Levy Manual

In determining chargeable equity and liabilities, a deduction is permitted for any assets ('high quality liquid assets') that are included within, or would qualify for inclusion in, the PRA's liquidity buffer (BKLM361000) but the deduction may not reduce the total chargeable equity and liabilities below nil.

The deduction applies to all assets that would qualify for the buffer and is not restricted only to those high quality liquid assets that are included at a given time within the buffer.

For chargeable periods ending on or before 31 December 2014, the deduction should be applied to reduce equity and long term liabilities (see BKLM810000) before short term liabilities. For chargeable periods ending on or after 1 January 2015, the order of set off is not prescribed, but when the high quality liquid assets are set against short term liabilities, the reduction is halved.

For guidance on when this deduction should be brought into the bank levy calculation, for each type of entity or group, click on the following links:

  • UK banking group or building society group - see BKLM321000

  • foreign banking group: relevant UK sub-groups - see BKLM322100

  • foreign banking group: UK resident entity which is a member of the relevant group but not a member of a relevant UK sub-group - see BKLM322200

  • foreign banking group: non-UK resident entity which is a member of the relevant group but is a member of a UK sub-group but is not a member of a relevant UK sub-group - see BKLM322300

  • foreign banking group: branch - see BKLM322400

  • relevant non-banking group: relevant UK banking sub-groups - see BKLM323100

  • relevant non-banking group: any UK resident bank which is a member of the relevant group but not a member of the relevant UK banking sub-group - see BKLM323200

  • relevant non-banking group: any entity other than a UK resident bank which is a member of the relevant group and a member of a UK banking sub-groups but not a relevant UK banking sub-group - see BKLM323300

  • relevant non-banking group: branch - see BKLM323400

  • for chargeable periods ending on or after 1 January 2021 - see BKLM315600.