Taxation (International and Other Provisions) Act 2010

316 Group treasury companies U.K.

(1) This section applies if, apart from this section, an amount (“the relevant amount”) is—

(a) a financing expense amount of a group treasury company because of meeting condition A, B or C in section 313, or

(b) a financing income amount of a group treasury company because of meeting condition A, B [F1 , C or D] in section 314.

(2) The relevant amount, and all other amounts that are relevant amounts in respect of the group treasury company and the relevant period, are treated as not being a financing expense amount or a financing income amount of the group treasury company, but only if that company makes an election for the purposes of this section in respect of the relevant period.

(3) An election under this section must be made within 3 years after the end of the relevant period.

(4) If two or more members of the worldwide group are group treasury companies in the relevant period, an election under this section made by any of them is not valid unless each of them makes such an election in respect of the relevant period before the end of the 3 year period mentioned in subsection (3).

(5) A company is a group treasury company in the relevant period if conditions 1, 2 and 3 are met.

(6) Condition 1 is that the company is a member of the worldwide group.

(7) Condition 2 is that the company undertakes treasury activities for the worldwide group in the relevant period (whether or not it also undertakes other activities).

[F2 (8) Condition 3 is that at least 90% of the relevant income of the company for the relevant period is group treasury revenue.]

(9) For the purposes of this section, a company undertakes treasury activities for the worldwide group in the relevant period if, in that period, it does one or more of the following things in relation to, or on behalf of, the worldwide group or any of its members—

(a) managing surplus deposits of money or overdrafts,

(b) making or receiving deposits of money,

(c) lending money,

(d) subscribing for or holding shares in another company which is a UK group company and a group treasury company,

(e) investing in debt securities, and

(f) hedging assets, liabilities, income or expenses.

(10) For the purposes of this section “group treasury revenue”, in relation to a company, means revenue—

(a) arising from the treasury activities that the company undertakes for the worldwide group, and

(b) accounted for as such under generally accepted accounting practice,

before any deduction (whether for expenses or otherwise).

(11) But revenue consisting of a dividend or other distribution is not group treasury revenue unless it is a dividend or distribution from a company that is, in the relevant period—

(a) a UK group company, and

(b) a group treasury company.

(12) In this section—

• “debt security” has the same meaning as in the FSA Handbook,

• “relevant income”, in relation to a company, means income—

  (a)

  arising from the activities of the company, and

  (b)

  accounted for as such under generally accepted accounting practice,

  before any deduction (whether for expenses or otherwise), and

• “relevant period” means the period of account of the worldwide group to which the relevant amount relates.

Textual Amendments

F1 Words in s. 316(1)(b) substituted (retrospectively) by Finance (No. 3) Act 2010 (c. 33), Sch. 5 paras. 21(2), 36(1)

F2 S. 316(8) substituted (retrospectively) by Finance (No. 3) Act 2010 (c. 33), Sch. 5 paras. 21(3), 36(1)