Finance Act 2011

Joint ventures

43 (1) This paragraph applies if—

(a) the relevant group is a foreign banking group or a relevant non-banking group,

(b) a member of the relevant group has an interest (“the relevant interest”) in a joint venture for the purposes of those provisions of the applicable accounting standards which relate to joint ventures,

(c) the amounts recognised in the relevant consolidated financial statements include amounts representing the liabilities (“the JV liabilities”) of the joint venture so far as determined by the relevant interest,

(d) the joint venture is a UK resident entity or, if the relevant group is a relevant non-banking group, a UK resident bank, and

(e) none of the liabilities of a relevant UK sub-group, a relevant UK banking sub-group or any entity for the purposes of (as the case may be) paragraph 17(6)(a) or (12)(a), 19(6)(a) or (12)(a) or 27(2)(a) include the JV liabilities.

(2) For the purpose of determining the chargeable equity and liabilities of the relevant group the joint venture is to be treated as if it were (as the case may be) a UK resident entity covered by paragraph 17(10) or a UK resident bank covered by paragraph 19(10)—

(a) the liabilities of which consist of the JV liabilities, and

(b) the assets of which consist of the assets of the joint venture so far as determined by the relevant interest.

(3) In this paragraph references to the amounts recognised in the relevant consolidated financial statements are to—

(a) the amounts recognised in the relevant group’s consolidated financial statements for the chargeable period as prepared under the applicable accounting standards, or

(b) if no such financial statements are prepared, the amounts which would have been so recognised had consolidated financial statements for the relevant group been prepared for the chargeable period under international accounting standards.

(4) “The applicable accounting standards” means—

(a) international accounting standards, or

(b) US GAAP if the members of the relevant group are determined under paragraph 4(7).