Finance Act 2011

Joint ventures U.K.

43 (1) This paragraph applies if— U.K.

(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).

44 (1) This paragraph applies for the purpose of determining the chargeable equity and liabilities of the relevant group or the relevant entity if, as at the end of the chargeable period— U.K.

(a) the parent entity or the relevant entity is a joint venture for the purposes of a JV standard, and

(b) the liabilities of the parent entity or the relevant entity include liabilities (“the JV liabilities”) which are subject to a double charge.

(2) The JV liabilities are to be left out for the purpose of determining the chargeable equity and liabilities.

(3) In sub-paragraph (1)(b) the reference to the liabilities of the parent entity includes any liabilities which, in the absence of this paragraph, would form part of the chargeable equity and liabilities of the relevant group.

(4) The JV liabilities are subject to a double charge if conditions A and B are met.

(5) Condition A is that an entity (“V”) which has an interest in the joint venture for the purposes of the JV standard—

(a) is an entity in relation to which paragraph 4(1) or 5(1) applies as at the end of the chargeable period (or in relation to which paragraph 4(1) or 5(1) would apply if V had a period of account ending at the same time as the chargeable period), or

(b) falls within sub-paragraph (6).

(6) V falls within this sub-paragraph if—

(a) there is another entity (“A”) in relation to which paragraph 4(1) applies as at the end of the chargeable period (or in relation to which paragraph 4(1) would apply if A had a period of account ending at the same time as the chargeable period), and

(b) V is (or would be) a member of the relevant group of which A is (or would be) the parent entity.

(7) Condition B is that—

(a) in the circumstances mentioned in sub-paragraph (5)(a) or sub-paragraph (5)(b) (when read with sub-paragraph (6)), the bank levy is charged (or would be charged), and

(b) in determining the amount of the bank levy, the JV liabilities are (or would be) liabilities for the purposes of paragraph 15(2)(a), 17(6)(a) or (12)(a), 19(6)(a) or (12)(a), 21(2)(a) or 27(2)(a) by virtue of V having an interest in the joint venture.

(8) “JV standard” means those provisions of international accounting standards or UK GAAP which relate to joint ventures.