5(1)Section 377 (late interest: party to loan relationship having major interest in other party) is amended as follows.U.K.
(2)The existing provision becomes subsection (1) of that section.
(3)In that subsection, omit the “and” at the end of paragraph (a) and insert at the end “and
(c)the condition in subsection (2) is met.”
(4)After that subsection insert—
“(2)The condition is that C is—
(a)resident for tax purposes in a non-qualifying territory at any time in the actual accrual period, or
(b)effectively managed in a non-taxing non-qualifying territory at any such time.
(3)For the purposes of this section—
(a)“non-qualifying territory” has the meaning given by paragraph 5E of Schedule 28AA to ICTA,
(b)a non-qualifying territory is “non-taxing” if companies are not under its law liable to tax by reason of domicile, residence or place of management, and
(c)“resident for tax purposes” means liable, under the law of the non-qualifying territory, to tax there by reason of domicile, residence or place of management.”