Finance Bill (HC Bill 102)

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(3) Condition B is that the reporting company mentioned in sub-
paragraph (1)(a) has agreed that an officer of Revenue of Customs
may exercise the power in this paragraph.

(4) An officer of Revenue and Customs may, by notice—

(a) 5revoke the appointment of the reporting company
mentioned in sub-paragraph (1)(a), and

(b) appoint in its place an eligible company to be the reporting
company of the group.

(5) The notice must—

(a) 10be given to each of the companies mentioned in sub-
paragraph (4), and

(b) specify the relevant period of account (whether by
specifying the dates on which it begins and ends or, if the
officer does not have that information, by reference to a
15date or dates).

(6) Where the power in sub-paragraph (4) is exercised—

(a) the appointment that is revoked ceases to have effect in
relation to—

(i) the relevant period of account, and

(ii) 20subsequent periods of account of the group;

(b) the appointment of the replacement has effect in relation to
the relevant period of account.

(7) For the purposes of this paragraph a company is “eligible” if and
only if the company —

(a) 25was a UK group company at a time during the relevant
period of account, and

(b) was not dormant throughout that period.

Obligation of reporting company to notify group members of its status

6 (1) This paragraph applies where the appointment of a reporting
30company has effect in relation to a period of account of a
worldwide group (“the relevant period of account”).

(2) The reporting company must, as soon as reasonably practicable
after the relevant time, notify each relevant company that it is the
group’s reporting company in relation to the relevant period of
35account.

(3) In sub-paragraph (2) “the relevant time” means—

(a) if the relevant period of account is the first period of
account in relation to which the appointment has effect, the
time of the appointment;

(b) 40otherwise, the end of the period of 6 months beginning
with the end of the relevant period of account.

(4) Sub-paragraph (2) does not require the reporting company to
notify a relevant company if the reporting company notified that
company under that sub-paragraph in relation to an earlier period
45of account.

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(5) The duty to comply with sub-paragraph (2) is enforceable by the
company required to be notified under that sub-paragraph.

(6) For the purposes of this paragraph a company is “relevant” if and
only if the company meets condition A or B.

(7) 5Condition A is that the company—

(a) was a UK group company at a time during the relevant
period of account, and

(b) was not dormant throughout that period.

(8) Condition B is that the company is the ultimate parent of the
10worldwide group.

Obligation of reporting company to submit interest restriction return

7 (1) This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
worldwide group.

(2) 15If the reporting company was appointed under paragraph 1 or 4,
it must submit a return for the period of account to an officer of
Revenue and Customs.

(3) If the reporting company was appointed under paragraph 5, it
must submit a return for the period of account to an officer of
20Revenue and Customs unless a return for the period has already
been submitted under sub-paragraph (2) or this sub-paragraph.

(4) A return submitted under this paragraph must be received by an
officer of Revenue and Customs before the filing date in relation to
the period of account.

(5) 25In this Part of this Act “the filing date”, in relation to a period of
account of a worldwide group, means—

(a) the end of the period of 12 months beginning with the end
of the period of account, or

(b) if later, the end of the period of 3 months beginning with
30the day on which the appointment of a reporting company
that has effect in relation to the period was made.

(6) A return submitted under this paragraph is of no effect unless it is
received by an officer of Revenue and Customs before—

(a) the end of the period of 36 months beginning with the end
35of the period of account, or

(b) if later, the end of the period of 3 months beginning with
the day on which the reporting company was appointed.

This is subject to paragraph 57.

Revised interest restriction return

8 (1) 40This paragraph applies where—

(a) the appointment of a reporting company has effect in
relation to a period of account of a worldwide group, and

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(b) a return (“the previous interest restriction return”) was
submitted under paragraph 7, or this paragraph, for the
period of account.

(2) The reporting company may submit a revised interest restriction
5return for the period of account to an officer of Revenue and
Customs.

(3) A revised interest restriction return submitted under sub-
paragraph (2) is of no effect unless it is received by an officer of
Revenue and Customs before—

(a) 10the end of the period of 36 months beginning with the end
of the period of account, or

(b) if later, the end of the period of 3 months beginning with
the day on which the reporting company was appointed.

This is subject to paragraphs 9 and 57.

(4) 15Where—

(a) a member of the group amends, or is treated as amending,
its company tax return, and

(b) as a result of the amendment any of the figures contained
in the previous interest restriction return have become
20incorrect,

the reporting company must submit a revised interest restriction
return to an officer of Revenue and Customs.

(5) A revised interest restriction return submitted under sub-
paragraph (4) must be received by an officer of Revenue and
25Customs before the end of the period of 3 months beginning
with—

(a) the day on which the amended company tax return was
received by an officer of Revenue and Customs, or

(b) (as the case may be) the day as from which the company
30tax return was treated as amended.

(6) A return submitted under this paragraph—

(a) must indicate the respects in which it differs from the
previous return, and

(b) supersedes the previous return.

35Extended period for submission of full return in place of abbreviated return

9 (1) This paragraph applies where—

(a) a reporting company has submitted an abbreviated
interest restriction return for a period of account of a
worldwide group in accordance with this Schedule, and

(b) 40the worldwide group is not subject to interest restrictions
in the return period.

(2) Despite the passing of the time limit in paragraph 8(3), a full
interest restriction return for the period of account submitted
under paragraph 8 has effect if it is received before the end of the
45period of 60 months beginning with the end of the period of
account.

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Meaning of “consenting company” and “non-consenting company”

10 (1) This paragraph makes provision for the purposes of this Part of
this Act about whether a company is a “consenting company” in
relation to an interest restriction return submitted by a reporting
5company.

(2) The company is a “consenting company” in relation to the return
if, before the return is submitted—

(a) it has notified the appropriate persons that it wishes to be
a consenting company in relation to interest restriction
10returns submitted by the reporting company, and

(b) it has not notified the appropriate persons that it no longer
wishes to be a consenting company in relation to such
returns.

(3) In sub-paragraph (2) “the appropriate persons” means—

(a) 15an officer of Revenue and Customs, and

(b) the reporting company in relation to the period of account.

(4) The company is a “non-consenting company”, in relation to the
return, if it is not a consenting company in relation to the return.

Company authorising reporting company appointment treated as consenting company

11 (1) 20This paragraph applies where a company—

(a) is listed in a statement under sub-paragraph (4)(c) of
paragraph 1 (list of companies authorising appointment of
reporting company), and

(b) is not included in a statement under sub-paragraph (6) of
25that paragraph (companies authorising appointment of
reporting company but not wishing to be consenting
companies).

(2) The company is treated as having given, at the time of the
appointment, a notice under paragraph 10(2)(a) in relation to
30interest restriction returns submitted by the reporting company.

(3) Sub-paragraph (2) does not prevent the company, at any time after
the appointment, from giving a notice under paragraph 10(2)(b) in
relation to interest restriction returns submitted by the reporting
company.

35Part 2 Contents of interest restriction return
Elections

12 (1) An election to which this paragraph applies must be made in an
interest restriction return for the period of account (or, as the case
40may be, the first period of account) to which the election relates.

(2) If an election to which this paragraph applies is capable of being
revoked, the revocation must be made in an interest restriction

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return for the period of account (or, as the case may be, the first
period of account) to which the revocation relates.

(3) This paragraph applies to the following elections—

(a) a group ratio election (see paragraph 13);

(b) 5a group ratio (blended) election (see paragraph 14);

(c) a group-EBITDA (chargeable gains) election (see
paragraph 15);

(d) an interest allowance (alternative calculation) election (see
paragraph 16);

(e) 10an interest allowance (non-consolidated investment)
election (see paragraph 17);

(f) an interest allowance (consolidated partnerships) election
(see paragraph 18);

(g) an abbreviated return election (see paragraph 19).

15Group ratio election

13 (1) This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
worldwide group.

(2) The reporting company may—

(a) 20elect that the interest allowance of the group is to be
calculated using the group ratio method, or

(b) revoke an election previously made.

(3) An election or revocation under this paragraph has effect in
relation to the period of account.

(4) 25An election under this paragraph is referred to in this Part of this
Act as a “group ratio election”.

(5) For provision as to the effect of a group ratio election, see section
396.

Group ratio (blended) election

14 (1) 30This paragraph applies where—

(a) the appointment of a reporting company has effect in
relation to a period of account of a worldwide group,

(b) the reporting company makes a group ratio election in
respect of the period of account, and

(c) 35a related party investor in relation to the period of account
is, throughout the period of account, a member of a
worldwide group (an “investor worldwide group”) other
than that mentioned in paragraph (a).

(2) The reporting company may—

(a) 40elect that Chapter 5 of Part 10 (interest allowance) is to
apply subject to the blended group ratio provisions, or

(b) revoke an election previously made.

(3) An election under this paragraph may—

(a) specify one or more investor worldwide groups,

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(b) specify, in relation to any such group, one or more
elections under this Schedule that are capable of being
made in relation to a period of account by a reporting
company of a worldwide group, and

(c) 5specify that the election is to be treated, for the purposes of
the blended group ratio provisions, as having effect, or as
not having effect, in relation to periods of account of the
investor’s worldwide group.

(4) Sub-paragraph (5) applies where—

(a) 10an election under this paragraph is made in relation to a
period of account,

(b) an election under this paragraph was made in relation to
any earlier period of account of the group,

(c) the election mentioned in paragraph (b) specified, under
15sub-paragraph (3)(c), that an election (“the investor’s
election”) was to be treated as having effect in relation to
periods of account of the investor’s worldwide group, and

(d) the investor’s election was an election which, if made by a
reporting company of a worldwide group, would have
20been irrevocable.

(5) The election mentioned in sub-paragraph (4)(a) must specify,
under sub-paragraph (3)(c), that the investor’s election is to be
treated as having effect in relation to periods of account of the
investor’s worldwide group.

(6) 25An election or revocation under this paragraph has effect in
relation to the period of account.

(7) An election under this paragraph is referred to in this Part of this
Act as a “group ratio (blended) election”.

(8) In this paragraph “the blended group ratio provisions” means the
30provisions of sections 401 to 403.

Group-EBITDA (chargeable gains) election

15 (1) This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
worldwide group.

(2) 35The reporting company may elect that Chapter 7 of Part 10 (group-
interest and group-EBITDA) is to apply subject to the chargeable
gains provisions.

(3) An election under this paragraph—

(a) has effect in relation to the period of account and
40subsequent periods of account of the worldwide group,
and

(b) is irrevocable.

(4) An election under this paragraph is referred to in this Part of this
Act as a “group-EBITDA (chargeable gains) election”.

(5) 45In this paragraph “the chargeable gains provisions” means the
provisions of section 422.

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Interest allowance (alternative calculation) election

16 (1) This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
worldwide group.

(2) 5The reporting company may elect that Chapter 7 of Part 10 (group-
interest and group-EBITDA) is to apply subject to the alternative
calculation provisions.

(3) An election under this paragraph—

(a) has effect in relation to the period of account and
10subsequent periods of account of the worldwide group,
and

(b) is irrevocable.

(4) An election under this paragraph is referred to in this Part of this
Act as an “interest allowance (alternative calculation) election”.

(5) 15In this paragraph “the alternative calculation provisions” means
sections 423 to 426.

Interest allowance (non-consolidated investment) election

17 (1) This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
20worldwide group.

(2) The reporting company may—

(a) elect that Chapter 7 of Part 10 (group-interest and group-
EBITDA) is to apply subject to the non-consolidated
investment provisions, or

(b) 25revoke an election previously made.

(3) An election under this paragraph must specify, for the purposes of
the non-consolidated investment provisions, one or more non-
consolidated associates of the worldwide group.

(4) An election or revocation under this paragraph has effect in
30relation to the period of account.

(5) An election under this paragraph is referred to in this Part of this
Act as an “interest allowance (non-consolidated investment)
election”.

(6) In this paragraph “the non-consolidated investment provisions”
35means sections 427 and 428.

Interest allowance (consolidated partnerships) election

18 (1) This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
worldwide group.

(2) 40The reporting company may elect that Chapter 7 of Part 10 (group-
interest and group-EBITDA) is to apply subject to the consolidated
partnership provisions.

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(3) An election under this paragraph must specify, for the purposes of
the consolidated partnership provisions, one or more consolidated
partnerships of the worldwide group.

(4) Where an election under this paragraph has been made in relation
5to a worldwide group, a further election may be made specifying,
for the purposes of the consolidated partnership provisions, one
or more additional consolidated partnerships of the worldwide
group.

(5) An election under this paragraph—

(a) 10has effect in relation to the period of account and
subsequent periods of account of the worldwide group,
and

(b) is irrevocable.

(6) An election under this paragraph is referred to in this Part of this
15Act as an “interest allowance (consolidated partnerships)
election”.

(7) In this paragraph “the consolidated partnership provisions”
means the provisions of section 430.

Abbreviated return election

19 (1) 20This paragraph applies where the appointment of a reporting
company has effect in relation to a period of account of a
worldwide group.

(2) The reporting company may—

(a) elect to submit an abbreviated interest restriction return, or

(b) 25revoke an election previously made.

(3) An election or revocation under this paragraph has effect in
relation to the period of account.

(4) An election under this paragraph is referred to in this Part of this
Act as an “abbreviated return election”.

(5) 30For provision as to the effect of an abbreviated return election,
see—

  • paragraph 20 of this Schedule (which limits the required
    contents of the interest restriction return);

  • section 393 (which deprives the group of the use of the
    35interest allowance for the return period, or any earlier
    period, in future periods of account).

Required contents of interest restriction return: full returns and abbreviated returns

20 (1) This paragraph makes provision about the contents of an interest
restriction return submitted by the reporting company of a
40worldwide group.

(2) Sub-paragraph (3) applies if—

(a) the worldwide group is subject to interest restrictions in
the return period, or

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(b) the worldwide group is not subject to interest restrictions
in the return period, and no abbreviated return election
has effect in relation to the period.

(3) The interest restriction return must—

(a) 5state the name and (where it has one) the Unique Taxpayer
Reference of the ultimate parent of the worldwide group;

(b) specify the return period;

(c) state the names and Unique Taxpayer References (where
they have them) of the companies that were UK group
10companies at any time during the return period, specifying
in relation to each whether it is a consenting or a non-
consenting company in relation to the return;

(d) contain a statement of calculations (see paragraph 21);

(e) if the group is subject to interest restrictions in the return
15period—

(i) contain a statement of that fact,

(ii) specify the total disallowed amount, and

(iii) contain a statement of allocated interest restrictions
(see paragraph 22);

(f) 20if the group is subject to interest reactivations in the return
period—

(i) contain a statement of that fact,

(ii) specify the interest reactivation cap,

(iii) contain a statement of allocated interest
25reactivations (see paragraph 25);

(g) contain a declaration by the person making the return that
the return is, to the best of that person’s knowledge, correct
and complete.

(4) Sub-paragraph (5) applies if—

(a) 30the worldwide group is not subject to interest restrictions
in the return period, and

(b) an abbreviated return election has effect in relation to the
period.

(5) The interest restriction return must—

(a) 35state that the group is not subject to interest restrictions in
the return period, and

(b) comply with paragraphs (a) to (c) and (g) of sub-paragraph
(3).

(6) If the ultimate parent of the worldwide group is a deemed parent
40by virtue of section 477 (stapled entities) or 478 (business
combinations), the requirement in sub-paragraph (3)(a) is to state
the name and (where it has one) Unique Taxpayer Reference of
each of the entities mentioned in that paragraph.

(7) In this Part of this Act—

(a) 45a return prepared in accordance with sub-paragraph (3) is
referred to as “a full interest restriction return”;

(b) a return prepared in accordance with sub-paragraph (5) is
referred to as “an abbreviated interest restriction return”.

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Statement of calculations

21 The statement of calculations required by paragraph 20(3)(d) to be
included in a full interest restriction return must include the
following information—

(a) 5for each company that was a UK group company at any
time during the return period—

(i) the company’s net tax-interest expense, or net tax-
interest income, for the return period (see section
389);

(ii) 10the company’s tax-EBITDA for the return period
(see section 406);

(b) the aggregate net tax-interest expense, and aggregate net
tax-interest income, of the group for the return period (see
section 390);

(c) 15the interest capacity of the group for the return period (see
section 392);

(d) the aggregate of interest allowances of the group for
periods before the return period so far as they are available
in the return period (see section 393);

(e) 20the interest allowance of the group for the return period
(see section 396);

(f) the aggregate tax-EBITDA of the group for the return
period (see section 405);

(g) where the interest allowance is calculated using the fixed
25ratio method and that allowance is given by section
397(1)(b), the adjusted net group-interest expense of the
group for the return period (see section 413);

(h) where the interest allowance is calculated using the group
ratio method—

(i) 30the group ratio percentage (see section 399 or 401);

(ii) the qualifying net group-interest expense of the
group for the return period (see section 414);

(iii) the group-EBITDA of the group for the return
period (see section 416).

35Statement of allocated interest restrictions

22 (1) The statement of allocated interest restrictions required by
paragraph 20(3)(e) to be included in a full interest restriction
return must—

(a) list one or more companies that—

(i) 40were UK group companies at any time during the
return period, and

(ii) had net tax-interest expense for the period,

(b) in relation to each company listed under paragraph (a),
specify an amount, and

(c) 45show the total of the amounts specified under paragraph
(b).