C1C3C2F1Part 10F1Corporate interest restriction
Pt. 10 excluded by 2010 c. 4, s. 937NA (as inserted (with effect in accordance with Sch. 5 para. 25(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 7)
Pt. 10 excluded by 2010 c. 4, s. 938V(d) (as substituted (with effect in accordance with Sch. 5 para. 25(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 9)
Pt. 10 excluded by 2010 c. 4, s. 938N(e) (as substituted (with effect in accordance with Sch. 5 para. 25(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 8)
F1CHAPTER 5Interest allowance
Interest allowance
400The debt cap
1
For the purposes of section 397 (and this section), “the fixed ratio debt cap” of a worldwide group for a period of account of the group is the sum of the following amounts—
a
the adjusted net group-interest expense of the group for the period;
b
the excess debt cap of the group that was generated in the immediately preceding period of account of the group (if any) (see subsections (3) to (7)).
2
For the purposes of section 398 (and this section), “the group ratio debt cap” of a worldwide group for a period of account of the group is the sum of the following amounts—
a
the qualifying net group-interest expense of the group for the period;
b
the excess debt cap of the group that was generated in the immediately preceding period of account of the group (if any) (see subsections (3) to (7)).
3
Where no group ratio election is in force in relation to a period of account of a worldwide group (“the generating period”), “the excess debt cap” of the group that is generated in the period is (subject to subsections (5) and (6))—
where—
A is the fixed ratio debt cap of the group for the generating period;
B is 30% of the aggregate tax-EBITDA of the group for the generating period.
4
Where a group ratio election is in force in relation to a period of account of a worldwide group (“the generating period”), “the excess debt cap” of the group that is generated in the period is (subject to subsections (5) and (6))—
where—
A is the group ratio debt cap of the group for the generating period;
B is the group ratio percentage of the aggregate tax-EBITDA of the group for the generating period.
5
Where the amount determined under subsection (3) or (4) is negative, “the excess debt cap” of the group that is generated in the period is nil.
6
Where the amount determined under subsection (3) or (4) is greater than the carry-forward limit, “the excess debt cap” of the group that is generated in the period is the carry-forward limit.
7
For this purpose the “carry-forward limit” is the sum of the following amounts—
a
the excess debt cap generated in the period of account of the group immediately preceding the generating period (if any);
b
the total disallowed amount of the group in the generating period.
8
See—
section 373 for the meaning of “the total disallowed amount”;
section 405 for the meaning of “aggregate tax-EBITDA”;
section 413 for the meaning of “adjusted net group-interest expense”;
section 414 for the meaning of “qualifying net group-interest expense”.
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)