Schedules

Schedule 3Corporate interest restriction etc.

Part 2Other amendments

26Penalties for errors: CIR alterations to be ignored in calculating potential lost revenue

1

Paragraph 5 of Schedule 24 to FA 2007 (penalties for errors: calculating potential lost revenue) is amended as follows.

2

In sub-paragraph (4), before paragraph (a) insert—

za

any CIR alteration, other than a permitted reduction, in respect of the tax period to which the document relates,

3

At the end insert—

5

For the purposes of sub-paragraph (4)(za)—

a

a “CIR alteration” means an alteration made to an amount disallowed, or reactivated, under Part 10 of the Taxation (International and Other Provisions) Act 2010 as a result of the submission of a revised interest restriction return under paragraph 8(4) of Schedule 7A to that Act;

b

a CIR alteration is a “permitted reduction” if it has the effect of—

i

reducing the allocated disallowance of a company by no more than the relevant proportion, or

ii

increasing the allocated reactivation of a company by no more than the relevant proportion.

c

the “relevant proportion” is—

i

for the purposes of paragraph (b)(i), the proportion by which the total disallowed amount of the worldwide group for the period is reduced, as a result of the submission of the revised interest restriction return;

ii

for the purposes of paragraph (b)(ii) the proportion by which the interest reactivation cap of the worldwide group is increased, as a result of the submission of the revised interest restriction return.

6

In sub-paragraph (5), the following terms have the same meaning as in Part 10 of the Taxation (International and Other Provisions) Act 2010—

  • “allocated disallowance” (see paragraph 22(2) of Schedule 7A to that Act);

  • “allocated reactivation” (see paragraph 25(2) of that Schedule);

  • “total disallowed amount of the worldwide group” and “interest reactivation cap of the worldwide group” (see section 373 of that Act).