Taxation (International and Other Provisions) Act 2010

[F1 382 The tax-interest expense amounts of a company U.K.

(1) References in this Part to a “tax-interest expense amount” of a company for a period of account of a worldwide group are to any amount that—

(a) is (or apart from this Part would be) brought into account for the purposes of corporation tax in a relevant accounting period of the company, and

(b) meets condition A, B or C.

[F2 (1A) But, in the case of a company which is a charity (as defined in paragraph 1 of Schedule 6 to FA 2010) at the end of the period of account, references in this Part to a “tax-interest expense amount” of the company do not include references to an amount which meets Condition A, B or C.]

(2) Condition A is that the amount is a relevant loan relationship debit (see section 383).

(3) Condition B is that the amount is a relevant derivative contract debit (see section 384).

(4) Condition C is that the amount is in respect of the financing cost implicit in amounts payable under a relevant arrangement or transaction.

(5) In subsection (4) “relevant arrangement or transaction” means—

(a) a finance lease,

(b) debt factoring, or any similar transaction, or

(c) a service concession arrangement if and to the extent that the arrangement is accounted for as a financial liability.

(6) Subsection (8) applies if an accounting period in which a tax-interest expense amount is (or apart from this Part would be) brought into account for the purposes of corporation tax contains one or more disregarded periods.

(7) A “disregarded period” is any period falling within the accounting period—

(a) which does not fall within the period of account of the worldwide group, or

(b) throughout which the company is not a member of the group.

(8) Where this subsection applies, the tax-interest expense amount mentioned in subsection (6) is reduced by such amount as is referable, on a just and reasonable basis, to the disregarded period or periods mentioned in that subsection.

(9) An amount may be reduced to nil under subsection (8).

(10) If—

(a) an amount would have met condition A, B or C but for the application of a rule preventing its deduction,

(b) some or all of it is deductible at a subsequent time as a result of the application of another rule, and

(c) none of conditions A to C are met at that time,

so much of the amount as is subsequently deductible is treated, at that time, as meeting whichever of condition A, B or C would have been met but for the application of the rule mentioned in paragraph (a).

(11) An example of a case to which subsection (10) applies is a case where—

(a) an amount is prevented from being deducted as a result of any provision made by Part 6A (hybrid and other mismatches), and

(b) another provision of that Part subsequently applies so as to permit some or all of it to be deducted from total profits.]

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 S. 382(1A) 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. 2