BKLM154300 - Introduction: structure: steps for determining the amount of the bank levy: step 3

Paragraph 6(2) of Schedule 19

»Ê¹ÚÌåÓýapp bank levy has a policy objective of encouraging banks to move to less risky funding profiles. To achieve this objective, a different rate of bank levy is applied to equity and long term liabilities than to short term liabilities.

»Ê¹ÚÌåÓýapp Schedule sets out at paragraphs 74 to 77 the following in determining whether equity and liabilities are long term or short term:

All equity is long-term.

Liabilities are long term if:

  • at the last day of the chargeable period they cannot be required to be repaid within a 12 month period from that date
  • in the case of liabilities that are intra-group liabilities where the condition in the first bullet above and certain further conditions are met, or
  • the liabilities are non-protected deposits other than from financial institutions and financial traders.

Once this identification has been undertaken then proceed to Step 4 (BKLM154400).