Finance (No. 2) Act 2017

Parts 1 to 9 and 11

191 (1) This paragraph applies if—

(a) an accounting period of a company (“the straddling period”) is treated as two separate accounting periods under paragraph 190(2)(a),

(b) it is necessary to apportion an amount (“the amount concerned”) for the straddling period to the two separate accounting periods, and

(c) the amount concerned is either—

(i) an amount chargeable to corporation tax which would have been less but for Part 10 of TIOPA 2010 (corporate interest restriction), or

(ii) an amount in respect of which corporation tax relief is available which would have been greater but for Part 10 of TIOPA 2010.

(2) The amount concerned is to be apportioned as follows—

• Step 1

  Determine what the amount concerned would have been but for Part 10 of TIOPA 2010 (“the notional amount”).

• Step 2

  Determine what amount of the notional amount would have been apportioned to the first separate accounting period had paragraph 190(2)(b) applied (“the notional apportioned amount”).

  If the notional apportioned amount is less than the amount concerned, proceed with steps 3 and 4.

  If the notional apportioned amount is equal to or greater than the amount concerned, the whole of the amount concerned is to be apportioned to the first separate accounting period.

• Step 3

  Take so much of the amount concerned as is equal to the notional apportioned amount and apportion it to the first accounting period.

• Step 4

  Take the remainder of the amount concerned and apportion it to the second separate accounting period.