F1Part 10F1Corporate interest restriction

F1CHAPTER 7Group-interest and group-EBITDA

Effect of interest allowance (non-consolidated investment) election

429Meaning of “non-consolidated associate”

(1)

An entity is a “non-consolidated associate” of a worldwide group, in relation to a period of account of the group (“the relevant period of account”) if condition A, B or C is met.

(2)

Condition A is that the entity is accounted for in the financial statements of the group for the relevant period of account—

(a)

as a joint venture or an associate, and

(b)

using the gross equity method or the equity method.

(3)

Condition B is that—

(a)

the entity is a partnership, and

(b)

an interest allowance (consolidated partnership) election has effect in relation to the relevant period of account.

(4)

Condition C is the entity is a non-consolidated subsidiary of the ultimate parent at any time during the relevant period of account.

(5)

In this section the following expressions have the meaning they have for accounting purposes—

  • “associate”;

  • “equity method”;

  • “gross equity method”;

  • “joint venture”.

(6)

In this section “entity” includes anything which is treated as an entity in the financial statements of the worldwide group (regardless of whether it has a legal personality as a body corporate).

(7)

This section has effect for the purposes of this Part.