BKLM442000 - Collection and management: responsible member for groups: the nominated entity

Paragraph 54 of Schedule 19

In the vast majority of cases the responsible member will be decided by the group nominating its own responsible member for a chargeable period.

The entity nominated must however meet certain conditions in order to become the responsible member for a chargeable period.

These conditions set out in paragraph 54(3) are that:

  • the entity is a 'chargeable member of the relevant group'. This term is defined in paragraph 53(3) of the Schedule as an entity that is within the charge to Corporation Tax at the end of the chargeable period and is:
  • a member of the banking or building society group, or
  • where the group is a relevant non-banking group, a member of a relevant UK banking sub-group, a UK resident bank (covered by paragraph 19(10)), an entity (covered by paragraph 19(11)) or a relevant foreign bank (covered by paragraph 19(17)).

Both securitisation companies (as defined) and limited liability partnerships (LLPs) forming part of a covered bond arrangement are excluded from being chargeable members and so cannot be the responsible member (BKLM433100).

  • The entity is within the charge to Corporation Tax at the end of the chargeable period.
  • The entity has an accounting period for Corporation Tax that is the same as the chargeable period. This means the accounting period must both start and end on the same day as the chargeable period.
  • Either:
    • The entity was nominated by the parent (or on behalf of the parent) to be the responsible member within 45 days of the start of the chargeable period, or
    • The renewal conditions are met in relation to the entity, and
  • HMRC do not reject the nomination (BKLM442100), or make a determination when the renewal conditions were met.

There were special transitional rules for dealing with nominations for chargeable periods starting on or before Finance Act 2011 received Royal Assent - see BKLM442200.

From 15 March 2018

From 15 March 2018, the annual nomination requirement was amended to permit automatic renewal of an entity’s responsible member status. This is subject to the ‘renewal conditions’.

The ‘renewal conditions’ are met if the entity was the group’s responsible member at the end of the previous chargeable period, and no other entity was nominated during the nomination period, which is the first 45 days of the new chargeable period.

From 15 March 2018, where HMRC rejects a nomination, the default arrangements will not apply if HMRC and the group’s parent entity, or another entity acting on the parent’s behalf, agree that a different entity should be the group’s responsible member within 30 days of HMRC rejecting the nomination.