2005 c. 22.

2009 c. 10, section 45 was amended by paragraphs 706 and 710 of Schedule 1 to the Corporation Tax Act 2010 (c. 4).

2010 c. 4, section 624 was amended by section 65 of the Finance Act 2016 (c. 24).

2017 c. 32.

S.I. 2006/964; relevant amending instruments are S.I. 2008/705 and 2009/2036.

A new Part 10 was inserted into the Taxation (International and Other Provisions) Act 2010 (c. 8) by paragraph 1 of Schedule 5 to the Finance (No. 2) Act 2017; “tax-interest expense amount” is defined in section 382 of that Part.

Regulation 69Z16 was inserted by S.I. 2008/705.

Regulation 69Z61 was inserted by S.I. 2009/2036.

S.I. 2006/3296, to which there are amendments not relevant to these Regulations.

“The net tax-interest income” is defined in section 389 of the Taxation (International and Other Provisions) Act 2010 inserted by paragraph 1 of Schedule 5 to the Finance (No. 2) Act 2017.

UK group company” is defined in section 492 of the Taxation (International and Other Provisions) Act 2010 inserted by paragraph 1 of Schedule 5 to the Finance (No. 2) Act 2017.

“Adjusted corporation tax earnings” is defined in section 406(2) of the Taxation (International and Other Provisions) Act 2010 inserted by paragraph 1 of Schedule 5 to the Finance (No. 2) Act 2017.

Section 414 was inserted by paragraph 1 of Schedule 5 to the Finance (No. 2) Act 2017.

S.I. 2007/3402, to which there are amendments not relevant to these Regulations.

S.I. 2009/2034, to which there are amendments not relevant to these Regulations.

http://www.legislation.gov.uk/uksi/2017/1227/madeThe Corporate Interest Restriction (Consequential Amendments) Regulations 2017enKing's Printer of Acts of Parliament2017-12-07CORPORATION TAXThese Regulations make provision for consequential amendments in connection with new Part 10 of the Taxation (International and Other Provisions) Act 2010 (“TIOPA 2010”) inserted by the Finance (No. 2) Act 2017 which make provision for the restriction of relief for interest and finance costs of multinational companies.

2017 No. 1227

Corporation Tax

The Corporate Interest Restriction (Consequential Amendments) Regulations 2017

Made7th December 2017

Laid before the House of Commons8th December 2017

Coming into force29th December 2017

The Treasury, in exercise of the powers conferred by sections 17(3) and 18 of the Finance (No. 2) Act 2005, section 45 of the Finance Act 2009, section 624 of the Corporation Tax Act 2010, paragraph 35 of Schedule 5 to the Finance (No. 2) Act 2017, make the following Regulations:

1Citation, commencement and effect1

These Regulations may be cited as the Corporate Interest Restriction (Consequential Amendments) Regulations 2017 and come into force on 29th December 2017.

2

The Regulations have effect for accounting periods beginning on or after 1 April 2017.

3

An accounting period beginning before and ending after 1 April 2017 is to be treated for the purposes of these Regulations as if so much of the accounting period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.

4

Where it is necessary to apportion an amount to the two separate accounting periods, it is to be apportioned on a just and reasonable basis.

2Amendments to the Authorised Investment Funds (Tax) Regulations 20061

The Authorised Investment Funds (Tax) Regulations 2006 are amended as follows.

2

In regulation 18 (interest distributions: general), after paragraph (2) insert—

2A

For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, an interest distribution is treated as not being a tax-interest expense amount of the authorised investment fund.

3

In regulation 69Z16 (PAIF distributions (interest)), after paragraph (2) insert—

2A

For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, a PAIF distribution (interest) is treated as not being a tax-interest expense amount of the company.

4

In regulation 69Z61 (TEF distributions (non-dividend)), after paragraph (2) insert—

2A

For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, a TEF distribution (non-dividend) is treated as not being a tax-interest expense amount of the Tax Elected Fund.

3Amendment to the Taxation of Securitisation Companies Regulations 20061

The Taxation of Securitisation Companies Regulations 2006 are amended as follows.

2

At the end insert—

221

For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010—

a

the net tax-interest income for an accounting period of the securitisation company is the sum of—

i

the amount of profit calculated under regulation 14 for that period, and

ii

the amount of any management fee paid in that period by the securitisation company to another UK group company in relation to the management of assets held by the securitisation company for the purposes of the capital market arrangement; and

b

the adjusted corporation tax earnings of the securitisation company for an accounting period is a negative amount equal to the amount in paragraph (a)(ii).

2

Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of that Act does not apply in relation to any interest paid or other distribution made by a securitisation company.

4Amendment to the Taxation of Insurance Securitisation Companies Regulations 20071

The Taxation of Insurance Securitisation Companies Regulations 2007 are amended as follows.

2

At the end insert—

12The Taxation (International and Other Provisions) Act 2010

Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 does not apply in relation to any interest paid or other distribution made by an insurance securitisation company.

5Amendment of the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 20091

Amend the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009 as follows.

2

In Part 2, after regulation 12 insert—

12AApplication of corporate interest restriction rules

For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, an interest distribution is treated as not being a tax-interest expense amount of the company.

Heather WheelerAndrew GriffithsTwo of the Lords Commissioners of Her Majesty’s Treasury7th December 2017EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision for consequential amendments in connection with new Part 10 of the Taxation (International and Other Provisions) Act 2010 (“TIOPA 2010”) inserted by the Finance (No. 2) Act 2017 which make provision for the restriction of relief for interest and finance costs of multinational companies.

Authority for the retrospective effect is given by paragraph 35 of Schedule 5 to the Finance (No. 2) Act 2017.

Regulation 2 amends the Authorised Investment Funds (Tax) Regulations 2006 so that interest distributions, PAIF distributions (interest) and TEF distributions (non-dividend) paid by authorised investment funds are treated as not being a tax-interest expense amount for the purposes of Part 10 of TIOPA 2010.

Regulation 3 amends the Taxation of Insurance Securitisation Companies Regulations 2007 so that for the purposes of Part 10 of TIOPA 2010, the net tax-interest income of a securitisation company is equal to the retained profit amount of the company and any management fee paid to another UK group company; any such management fee is treated as a negative amount of adjusted corporation tax earnings. Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 is disapplied in relation to any interest paid or other distribution made by a securitisation company.

Regulation 4 amends the Taxation of Insurance Securitisation Companies Regulations 2007 to disapply section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 in relation to any interest paid or other distribution made by an insurance securitisation company.

Regulation 5 amends the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009 so that interest distributions paid by an investment trust are treated as not being a tax-interest expense amount for the purposes of Part 10 of TIOPA 2010.

A Tax Information and Impact Note covering this instrument was published on 5 December 2016 alongside the Finance Bill 2017 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.

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.
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<note class="footnote" eId="f00002">
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<ref href="http://www.legislation.gov.uk/id/ukpga/2009/10">2009 c. 10</ref>
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<ref href="http://www.legislation.gov.uk/id/ukpga/2010/4">2010 (c. 4)</ref>
.
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<ref href="http://www.legislation.gov.uk/id/ukpga/2010/4">2010 c. 4</ref>
, section 624 was amended by section 65 of the Finance Act
<ref href="http://www.legislation.gov.uk/id/ukpga/2016/24">2016 (c. 24)</ref>
.
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<note class="footnote" eId="f00004">
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<ref href="http://www.legislation.gov.uk/id/ukpga/2017/32">2017 c. 32</ref>
.
</p>
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<note class="footnote" eId="f00005">
<p>
<ref href="http://www.legislation.gov.uk/id/uksi/2006/964">S.I. 2006/964</ref>
; relevant amending instruments are
<ref href="http://www.legislation.gov.uk/id/uksi/2008/705">S.I. 2008/705</ref>
and
<ref href="http://www.legislation.gov.uk/id/uksi/2009/2036">2009/2036</ref>
.
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<note class="footnote" eId="f00006">
<p>
A new Part 10 was inserted into the Taxation (International and Other Provisions) Act
<ref href="http://www.legislation.gov.uk/id/ukpga/2010/8">2010 (c. 8)</ref>
by paragraph 1 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017; “tax-interest expense amount” is defined in section 382 of that Part.
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<note class="footnote" eId="f00007">
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Regulation 69Z16 was inserted by
<ref href="http://www.legislation.gov.uk/id/uksi/2008/705">S.I. 2008/705</ref>
.
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<note class="footnote" eId="f00008">
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Regulation 69Z61 was inserted by
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.
</p>
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<note class="footnote" eId="f00009">
<p>
<ref href="http://www.legislation.gov.uk/id/uksi/2006/3296">S.I. 2006/3296</ref>
, to which there are amendments not relevant to these Regulations.
</p>
</note>
<note class="footnote" eId="f00010">
<p>
“The net tax-interest income” is defined in section 389 of the Taxation (International and Other Provisions) Act 2010 inserted by paragraph 1 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017.
</p>
</note>
<note class="footnote" eId="f00011">
<p>
<abbr class="Acronym" title="United Kingdom">UK</abbr>
group company” is defined in section 492 of the Taxation (International and Other Provisions) Act 2010 inserted by paragraph 1 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017.
</p>
</note>
<note class="footnote" eId="f00012">
<p>
“Adjusted corporation tax earnings” is defined in section 406(2) of the Taxation (International and Other Provisions) Act 2010 inserted by paragraph 1 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017.
</p>
</note>
<note class="footnote" eId="f00013">
<p>
Section 414 was inserted by paragraph 1 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017.
</p>
</note>
<note class="footnote" eId="f00014">
<p>
<ref href="http://www.legislation.gov.uk/id/uksi/2007/3402">S.I. 2007/3402</ref>
, to which there are amendments not relevant to these Regulations.
</p>
</note>
<note class="footnote" eId="f00015">
<p>
<ref href="http://www.legislation.gov.uk/id/uksi/2009/2034">S.I. 2009/2034</ref>
, to which there are amendments not relevant to these Regulations.
</p>
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<p class="title">
<shortTitle>The Corporate Interest Restriction (Consequential Amendments) Regulations 2017</shortTitle>
</p>
<p class="MadeDate">
<span>Made</span>
<docDate date="2017-12-07">7th December 2017</docDate>
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<p class="LaidDate">
<span>Laid before the House of Commons</span>
<docDate date="2017-12-08">8th December 2017</docDate>
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<span>Coming into force</span>
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The Treasury, in exercise of the powers conferred by sections 17(3) and 18 of the Finance (
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2) Act 2005
<noteRef href="#f00001" class="footnote" marker="1"/>
, section 45 of the Finance Act 2009
<noteRef href="#f00002" class="footnote" marker="2"/>
, section 624 of the Corporation Tax Act 2010
<noteRef href="#f00003" class="footnote" marker="3"/>
, paragraph 35 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017
<noteRef href="#f00004" class="footnote" marker="4"/>
, make the following Regulations:
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<heading>Citation, commencement and effect</heading>
<paragraph eId="regulation-1-1">
<num>1</num>
<content>
<p>These Regulations may be cited as the Corporate Interest Restriction (Consequential Amendments) Regulations 2017 and come into force on 29th December 2017.</p>
</content>
</paragraph>
<paragraph eId="regulation-1-2">
<num>2</num>
<content>
<p>The Regulations have effect for accounting periods beginning on or after 1 April 2017.</p>
</content>
</paragraph>
<paragraph eId="regulation-1-3">
<num>3</num>
<content>
<p>An accounting period beginning before and ending after 1 April 2017 is to be treated for the purposes of these Regulations as if so much of the accounting period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.</p>
</content>
</paragraph>
<paragraph eId="regulation-1-4">
<num>4</num>
<content>
<p>Where it is necessary to apportion an amount to the two separate accounting periods, it is to be apportioned on a just and reasonable basis.</p>
</content>
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<num>2</num>
<heading>Amendments to the Authorised Investment Funds (Tax) Regulations 2006</heading>
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<content>
<p>
The Authorised Investment Funds (Tax) Regulations 2006
<noteRef href="#f00005" class="footnote" marker="5"/>
are amended as follows.
</p>
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<content>
<p>In regulation 18 (interest distributions: general), after paragraph (2) insert—</p>
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<p>
For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, an interest distribution is treated as not being a tax-interest expense amount
<noteRef href="#f00006" class="footnote" marker="6"/>
of the authorised investment fund.
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<num>3</num>
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<p>
In regulation 69Z16 (PAIF distributions (interest))
<noteRef href="#f00007" class="footnote" marker="7"/>
, after paragraph (2) insert—
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<p>For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, a PAIF distribution (interest) is treated as not being a tax-interest expense amount of the company.</p>
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<num>4</num>
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<p>
In regulation 69Z61 (TEF distributions (non-dividend))
<noteRef href="#f00008" class="footnote" marker="8"/>
, after paragraph (2) insert—
</p>
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<content>
<p>For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, a TEF distribution (non-dividend) is treated as not being a tax-interest expense amount of the Tax Elected Fund.</p>
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<heading>Amendment to the Taxation of Securitisation Companies Regulations 2006</heading>
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<num>1</num>
<content>
<p>
The Taxation of Securitisation Companies Regulations 2006
<noteRef href="#f00009" class="footnote" marker="9"/>
are amended as follows.
</p>
</content>
</paragraph>
<paragraph eId="regulation-3-2">
<num>2</num>
<content>
<p>At the end insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="unknown unknown unknown double" startQuote="" endQuote="">
<hcontainer name="regulation" eId="d4e221">
<num>22</num>
<paragraph eId="d4e225">
<num>1</num>
<intro>
<p>For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010—</p>
</intro>
<subparagraph eId="d4e231">
<num>a</num>
<intro>
<p>
the net tax-interest income
<noteRef href="#f00010" class="footnote" marker="10"/>
for an accounting period of the securitisation company is the sum of—
</p>
</intro>
<clause eId="d4e239">
<num>i</num>
<content>
<p>the amount of profit calculated under regulation 14 for that period, and</p>
</content>
</clause>
<clause eId="d4e245">
<num>ii</num>
<content>
<p>
the amount of any management fee paid in that period by the securitisation company to another
<abbr class="Acronym" title="United Kingdom">UK</abbr>
group company
<noteRef href="#f00011" class="footnote" marker="11"/>
in relation to the management of assets held by the securitisation company for the purposes of the capital market arrangement; and
</p>
</content>
</clause>
</subparagraph>
<subparagraph eId="d4e256">
<num>b</num>
<content>
<p>
the adjusted corporation tax earnings
<noteRef href="#f00012" class="footnote" marker="12"/>
of the securitisation company for an accounting period is a negative amount equal to the amount in paragraph (a)(ii).
</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="d4e264">
<num>2</num>
<content>
<p>
Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of that Act
<noteRef href="#f00013" class="footnote" marker="13"/>
does not apply in relation to any interest paid or other distribution made by a securitisation company.
</p>
</content>
</paragraph>
</hcontainer>
</quotedStructure>
</mod>
</p>
</content>
</paragraph>
</hcontainer>
<hcontainer name="regulation" eId="regulation-4">
<num>4</num>
<heading>Amendment to the Taxation of Insurance Securitisation Companies Regulations 2007</heading>
<paragraph eId="regulation-4-1">
<num>1</num>
<content>
<p>
The Taxation of Insurance Securitisation Companies Regulations 2007
<noteRef href="#f00014" class="footnote" marker="14"/>
are amended as follows.
</p>
</content>
</paragraph>
<paragraph eId="regulation-4-2">
<num>2</num>
<content>
<p>At the end insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="secondary unknown unknown double" startQuote="" endQuote="">
<hcontainer name="regulation" eId="d4e297">
<num>12</num>
<heading>The Taxation (International and Other Provisions) Act 2010</heading>
<content>
<p>Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 does not apply in relation to any interest paid or other distribution made by an insurance securitisation company.</p>
</content>
</hcontainer>
</quotedStructure>
</mod>
</p>
</content>
</paragraph>
</hcontainer>
<hcontainer name="regulation" eId="regulation-5">
<num>5</num>
<heading>Amendment of the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009</heading>
<paragraph eId="regulation-5-1">
<num>1</num>
<content>
<p>
Amend the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009
<noteRef href="#f00015" class="footnote" marker="15"/>
as follows.
</p>
</content>
</paragraph>
<paragraph eId="regulation-5-2">
<num>2</num>
<content>
<p>In Part 2, after regulation 12 insert—</p>
<p class="BlockAmendment">
<mod>
<quotedStructure class="secondary unknown unknown double" startQuote="" endQuote="">
<hcontainer name="regulation" eId="d4e328">
<num>12A</num>
<heading>Application of corporate interest restriction rules</heading>
<content>
<p>For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, an interest distribution is treated as not being a tax-interest expense amount of the company.</p>
</content>
</hcontainer>
</quotedStructure>
</mod>
</p>
</content>
</paragraph>
</hcontainer>
<hcontainer name="signatures">
<content>
<block name="signature">
<signature>
<person refersTo="#ref-d4e337">Heather Wheeler</person>
<person refersTo="#ref-d4e339">Andrew Griffiths</person>
<role refersTo="#ref-d4e341">Two of the Lords Commissioners of Her Majesty’s Treasury</role>
<date date="2017-12-07">7th December 2017</date>
</signature>
</block>
</content>
</hcontainer>
</body>
<conclusions>
<blockContainer class="ExplanatoryNotes">
<heading>EXPLANATORY NOTE</heading>
<intro>
<p>(This note is not part of the Regulations)</p>
</intro>
<p>
<authorialNote>
<p>
These Regulations make provision for consequential amendments in connection with new Part 10 of the Taxation (International and Other Provisions) Act 2010 (“TIOPA 2010”) inserted by the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017 which make provision for the restriction of relief for interest and finance costs of multinational companies.
</p>
<p>
Authority for the retrospective effect is given by paragraph 35 of Schedule 5 to the Finance (
<abbr title="Number" xml:lang="">No.</abbr>
2) Act 2017.
</p>
<p>Regulation 2 amends the Authorised Investment Funds (Tax) Regulations 2006 so that interest distributions, PAIF distributions (interest) and TEF distributions (non-dividend) paid by authorised investment funds are treated as not being a tax-interest expense amount for the purposes of Part 10 of TIOPA 2010.</p>
<p>
Regulation 3 amends the Taxation of Insurance Securitisation Companies Regulations 2007 so that for the purposes of Part 10 of TIOPA 2010, the net tax-interest income of a securitisation company is equal to the retained profit amount of the company and any management fee paid to another
<abbr class="Acronym" title="United Kingdom">UK</abbr>
group company; any such management fee is treated as a negative amount of adjusted corporation tax earnings. Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 is disapplied in relation to any interest paid or other distribution made by a securitisation company.
</p>
<p>Regulation 4 amends the Taxation of Insurance Securitisation Companies Regulations 2007 to disapply section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 in relation to any interest paid or other distribution made by an insurance securitisation company.</p>
<p>Regulation 5 amends the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009 so that interest distributions paid by an investment trust are treated as not being a tax-interest expense amount for the purposes of Part 10 of TIOPA 2010.</p>
<p>
A Tax Information and Impact Note covering this instrument was published on 5 December 2016 alongside the Finance Bill 2017 and is available on the website at
<a href="https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins">https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins</a>
. It remains an accurate summary of the impacts that apply to this instrument.
</p>
</authorialNote>
</p>
</blockContainer>
</conclusions>
</act>
</akomaNtoso>