Interest allowance (non-consolidated investment) election: “non-consolidated associate”U.K.
13(1)Section 429 (meaning of “non-consolidated associate”) is amended as follows.
(2)In subsection (1), for “or C” substitute “, C or D”.
(3)In subsection (2), in the words before paragraph (a), for “the entity” substitute “the ultimate parent’s interest in the entity”.
(4)After subsection (4) insert—
“(4A)Condition D is that—
(a)the entity is—
(i)a partnership, or
(ii)a transparent entity (other than a partnership), and
(b)the ultimate parent’s interest in the entity is accounted for in the financial statements of the group for the relevant period of account on the basis of fair value accounting.”
(5)For subsection (6) substitute—
“(6)For the purposes of this section—
(a)“entity” includes anything which may be treated as an entity for accounting purposes (regardless of whether it has a legal personality as a body corporate);
(b)an entity is “transparent” if—
(i)it is not chargeable to corporation tax or income tax as a person (ignoring any exemptions), or
(ii)it is a collective investment vehicle which is “transparent for income tax purposes” for the purposes of paragraph 8 of Schedule 5AAA to TCGA 1992 (see paragraph 8(7) of that Schedule).”