Taxation (International and Other Provisions) Act 2010

[F1 414 Qualifying net group-interest expense U.K.

(1) For the purposes of this Part the “qualifying net group-interest expense” of a worldwide group for a period of account of the group is (subject to subsection (2))—

where

A is the adjusted net group-interest expense of the group for the period (see section 413);

B is the sum of any downward adjustments (see subsection (3)).

(2) Where the amount determined under subsection (1) is negative, “the qualifying net group-interest expense” of the group for the period is nil.

(3) In this section “downward adjustment” means a relevant expense amount that meets the condition in subsection (4), so far as it relates to—

(a) a transaction with, or a financial liability owed to, a person who, at any time during the period, is a related party of a member of the group,

(b) results-dependent securities, or

(c) [F2 relevant] equity notes.

(4) The condition mentioned in subsection (3) is that the amount—

(a) is recognised in the financial statements of the group for the period, as an item of profit and loss, and is not (and is not comprised in) a downward adjustment for the purposes of section 413 (adjusted net group-interest expense), or

(b) is (or is comprised in) an upward adjustment for the purposes of that section.

(5) In a case where—

(a) the person mentioned in subsection (3)(a) is not a related party of a member of the group during any part of the period of account, or

(b) during any part of the period of account, the financial liability mentioned in subsection (3)(a) is owed to a person who is not a related party of a member of the group,

the amount of the downward adjustment under subsection (3)(a) is to be reduced by such amount (if any) as is attributable, on a just and reasonable basis, to that part.]

Textual Amendments

F1 Pt. 10: the existing Pt. 10 renumbered as Pt. 11 (except for ss. 375, 376 which are repealed), the existing ss. 372-374, 377-382 renumbered as ss. 499-507 and a new Pt. 10 (ss. 372-498) inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1, 10(1)(2)(a)(3) (with Sch. 5 paras. 27, 32-34)

F2 Word in s. 414(3)(c) inserted (with effect in accordance with Sch. 3 para. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 10

Modifications etc. (not altering text)

C4 S. 414(3)(b) excluded by S.I. 2006/3296, reg. 22(2) (as inserted (29.12.2017) by The Corporate Interest Restriction (Consequential Amendments) Regulations 2017 (S.I. 2017/1227), regs. 1, 3(2))

C5 S. 414(3)(b) excluded by S.I. 2007/3402, reg. 12 (as inserted (29.12.2017) by The Corporate Interest Restriction (Consequential Amendments) Regulations 2017 (S.I. 2017/1227), regs. 1, 4(2))