Finance Bill (HC Bill 102)

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Part 8 Company tax returns
Elections under section 375, 377 or 380

68 The following elections (or their revocation) must be made by a
5company in its company tax return (whether as originally made or
by amendment) for the accounting period to which the election (or
revocation) relates—

(a) an election under section 375 (a non-consenting company
leaving pro-rata share of total disallowed amount out of
10account),

(b) an election under section 377 (a company specifying tax-
interest expense amounts to be left out of account), and

(c) an election under section 380 (a company specifying tax-
interest expense amounts to be brought into account).

15Amendments to take account of operation of this Part of this Act (including elections)

69 (1) A company may amend its company tax return for an accounting
period so as to make (or revoke) an election under section 375 at
any time before—

(a) the filing date in relation to the period of account of the
20worldwide group to which the interest restriction return in
question relates (see paragraph 7(5)), or

(b) if later, the end of the period of 3 months beginning with
the day on which the interest restriction return in question
is received by an officer of Revenue and Customs.

(2) 25A company that amends its company tax return for an accounting
period as mentioned in sub-paragraph (1) must, before the time
limit specified in that sub-paragraph, also amend the return to
take account of the election (or revocation).

(3) If—

(a) 30a company is required by section 376 to leave an amount
out of account in an accounting period, and

(b) the company has already delivered a company tax return
for the period,

the company must amend its company tax return to take account
35of the requirement.

(4) The amendment must be made before the end of the period of 3
months beginning with the day after the relevant date (within the
meaning of section 376).

(5) A company may amend its company tax return for an accounting
40period so as to make (or revoke) an election under section 377 or
380 at any time before—

(a) the end of the period of 36 months beginning with the day
after the end of the accounting period, or

(b) if later, the end of the period of 3 months beginning with
45the day on which a relevant interest restriction return was
received by an officer of Revenue and Customs.

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(6) A company that amends its company tax return for an accounting
period as mentioned in sub-paragraph (5) must, before the time
limit specified in that sub-paragraph, also amend the return to
take account of the election (or revocation).

(7) 5In sub-paragraph (5) “a relevant interest restriction return” means
an interest restriction return for a period of account in relation to
which the accounting period is a relevant accounting period.”

(8) The time limit for amending a company tax return given by
paragraph 15(4) of Schedule 18 to FA 1998 is subject to the time
10limits given by this paragraph.

Cases where company treated as amending return

70 (1) If—

(a) a company has delivered a company tax return for an
accounting period, but

(b) 15as a result of the submission of an interest restriction
return, information contained in the company tax return is
incorrect (for example, there is a change in the amount of
profits on which corporation tax is chargeable),

the company is treated as having amended its company tax return
20for the accounting period so as to correct the information.

(2) If—

(a) a notice of determination under paragraph 56 or 58 is given
to a company in relation to an accounting period, and

(b) the company has already delivered a company tax return
25for the period,

the company is treated as having amended its company tax return
to take account of the determination.

Regulations for purposes of paragraph 70 etc

71 (1) The Commissioners may by regulations—

(a) 30make provision generally for the purposes of paragraph
70, and

(b) make provision for other cases where a company is to be
treated as having amended its company tax return.

(2) The provision that may be made by the regulations includes
35provision—

(a) permitting or requiring the company to deliver an
amended company tax return for the accounting period;

(b) specifying amendments that may or must be made in the
return;

(c) 40specifying a time limit for the delivery of the return that is
later than that determined under paragraph 15(4) of
Schedule 18 to FA 1998 (amendment of return by
company).

Consequential claims to company tax returns

72 (1) 45This paragraph applies if—

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(a) a company amends, or is treated as amending, its company
tax return for an accounting period in consequence of a
closure notice given in respect of an interest restriction
return under paragraph 47 or a notice of determination
5given to the company under paragraph 56 or 58, and

(b) the amendment has the effect of increasing the amount of
corporation tax payable by the company for the accounting
period.

(2) Any qualifying claim may be made or given within the period of
10one year beginning with the day on which the company receives a
copy of the closure notice under paragraph 60(5) or the notice of
determination.

(3) Any qualifying claim previously made which is not irrevocable—

(a) may be revoked or varied within that one-year period, and

(b) 15if it is revoked or varied, must be done so in the same
manner as it was made and by or with the consent of the
same person or persons who made or consented to it (or, if
a person has died, by or with the consent of the person’s
personal representatives).

(4) 20For the purposes of this paragraph a claim is a “qualifying” claim
if its making, revocation or variation has the effect of reducing the
liability of the company to corporation tax for the accounting
period (whether or not it also reduces the liability to tax of the
company for other periods).

(5) 25But a claim is not a “qualifying” claim if—

(a) the making, revocation or variation of the claim would
alter the liability to tax of any person other than the
company, or

(b) the making, revocation or variation of the claim is such
30that, if it were to be made, revoked or varied, the total of
the reductions in liability to tax of the company would
exceed the additional liability to corporation tax resulting
from the amendment.

(6) If a qualifying claim is made, revoked or varied as a result of this
35paragraph, all such adjustments must be made as are required to
take account of the effect of taking that action on the liability of the
company to tax for any period.

(7) The adjustments may be made by way of discharge or repayment
of tax or the making of amendments, assessments or otherwise.

(8) 40The provisions of TMA 1970 relating to appeals against decisions
on claims apply with any necessary modifications to a decision on
the revocation or variation of a claim as a result of this paragraph.

(9) In this paragraph (except in sub-paragraph (8)) “claim” includes
an election, an application and a notice, and references to making
45a claim are to be read accordingly.

(10) In this paragraph “tax” (except in the expression “corporation
tax”) includes income tax and capital gains tax.

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Meaning of “company tax return”

73 In this Schedule “company tax return” has the meaning given by
paragraph 3 of Schedule 18 to FA 1998.

Part 9 5Supplementary
Double jeopardy

74 A person is not liable to a penalty under any provision of this
Schedule in respect of anything in respect of which the person has
been convicted of an offence.

10Notice of appeal

75 Notice of an appeal under this Schedule must specify the grounds
of appeal.

Conclusiveness of amounts stated in interest restriction return

76 (1) This paragraph applies to an amount stated in an interest
15restriction return submitted under paragraph 7 or 8 (“the interest
restriction return”), other than an amount that is also stated in a
company tax return.

(2) If the amount can no longer be altered, it is taken to be
conclusively determined for the purposes of the Corporation Tax
20Acts.

(3) An amount is regarded as one that can no longer be altered if—

(a) the interest restriction return has not been superseded by a
subsequent interest restriction return;

(b) the applicable time limit has passed;

(c) 25any enquiry into the interest restriction return has been
completed;

(d) if the closure notice in relation to an enquiry into the
interest restriction return contained a statement under
paragraph 49(2)(b), the period within which an appeal
30against the statement may be brought has ended; and

(e) if such an appeal is brought, the appeal has been finally
determined.

(4) For the purposes of sub-paragraph (3) the “applicable time limit”
means the time limit in paragraph 8(3) or, in a case where
35paragraph 57(2) or (4) applies and imposes a later time limit for
submission of the interest restriction return, that later time limit.

(5) Nothing in this paragraph affects—

(a) the power under paragraph 42 (extended time limits for
opening enquiries: discovery of errors), or

(b) 40any power to make a determination under paragraph 56 or
58 (determinations by officers of Revenue and Customs).”

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Part 3 Consequential amendments

TMA 1970

3 (1) In section 98 of TMA 1970 (special returns, etc), in the table in subsection (5),
5in the first column, the entry relating to regulations under section 283, 284,
285, 295 or 297 of TIOPA 2010 is repealed.

(2) In consequence of sub-paragraph (1), paragraph 157(3) of Schedule 8 to
TIOPA 2010 is repealed.

FA 1998

4 10In paragraph 88 of Schedule 18 to FA 1998 (conclusiveness of amounts stated
in company tax returns), at the end insert—

(9) Nothing in this paragraph affects the operation of any provision of
Part 10 of TIOPA 2010 (corporate interest restriction).”

CTA 2009

5 15In section A1 of CTA 2009 (overview of the Corporation Tax Acts), in
subsection (2)—

(a) omit paragraph (i), and

(b) after paragraph (ja) insert—

(jb) Part 10 of that Act (corporate interest restriction),”.

20CTA 2010

6 CTA 2010 is amended as follows.

7 After section 937N (risk transfer schemes) insert—

937NA Priority

For the purposes of this Part, the provisions of Part 10 of TIOPA 2010
25(corporate interest restriction) are to be treated as of no effect.”

8 In section 938N (group mismatch schemes: priority), for paragraph (e)
substitute—

(e) Part 10 of that Act (corporate interest restriction).”

9 In section 938V (tax mismatch schemes: priority), for paragraph (d)
30substitute—

(d) Part 10 of that Act (corporate interest restriction).”

TIOPA 2010: consequential renumbering

10 (1) In consequence of the insertion of a new Part 10 of TIOPA 2010 by Part 1 of
this Schedule, the existing Part 10 of that Act becomes a new Part 11.

(2) 35The following provisions of TIOPA 2010 are repealed—

(a) the existing sections 375 and 376 (which contain powers that are no
longer exercisable), and

(b) the existing section 381(2)(e) and (f) (which refer to those sections);

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but the repeals made by this sub-paragraph do not affect any orders made
under section 375 or 376 before the passing of this Act.

(3) As a result of the provision made by sub-paragraphs (1) and (2), the
following provisions of TIOPA 2010 are renumbered as follows—

(a) 5the existing section 372 becomes section 499;

(b) the existing section 373 becomes section 500;

(c) the existing section 374 becomes section 501;

(d) the existing section 377 becomes section 502;

(e) the existing section 378 becomes section 503;

(f) 10the existing section 379 becomes section 504;

(g) the existing section 380 becomes section 505;

(h) the existing section 381 becomes section 506;

(i) the existing section 382 becomes section 507.

(4) Consequently—

(a) 15in section 287(2A) of TCGA 1992, for “372” substitute “499”;

(b) in section 1014(2)(fa) of ITA 2007, for “372” substitute “499”;

(c) in section 1171(2)(f) of CTA 2010, for “372” substitute “499”;

(d) in section 1 of TIOPA 2010—

(i) in subsection (4), for “10” substitute “11”;

(ii) 20in subsection (5), for “373” substitute “500”;

(e) in section 381(2) of TIOPA 2010—

(i) in paragraph (a), for “372” substitute “499”;

(ii) in paragraph (b), for “373” substitute “500”;

(iii) in paragraph (d), for “374” substitute “501”;

(iv) 25in paragraph (g), for “377(2) and (3)” substitute “502(2) and
(3)”;

(v) in paragraph (h), for “380” substitute “505”;

(vi) in paragraph (i), for “382” substitute “507”.

(5) In section 379(1) and (2) of TIOPA 2010 (index of defined expressions), for
30“8” substitute “10”.

TIOPA 2010: repeal of Part 7

11 (1) Part 7 of TIOPA 2010 (tax treatment of financing costs and income) is
repealed; and accordingly the following provisions of that Act are also
repealed—

(a) 35section 1(1)(d) (overview);

(b) in Schedule 9, Part 7 (transitional provision);

(c) in Schedule 11, Part 5 (index of defined expressions).

(2) In consequence of sub-paragraph (1), the following enactments (which
amend provisions repealed by that sub-paragraph) are repealed—

(a) 40in F(No.3)A 2010, section 11 and Schedule 5;

(b) in FA 2011, in Schedule 13, paragraphs 29 and 30;

(c) in FA 2012—

(i) section 31 and Schedule 5;

(ii) in Schedule 16, paragraphs 242 and 243(a);

(iii) 45in Schedule 20, paragraphs 43 to 45;

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(d) in FA 2013, section 44;

(e) in FA 2014, section 39.

(3) The following regulations were made under powers contained in Part 7 of
TIOPA 2010 and are therefore revoked by virtue of sub-paragraph (1)

(a) 5the Corporation Tax (Financing Costs and Income) Regulations 2009
(S.I. 2009/3173S.I. 2009/3173);

(b) the Corporation Tax (Tax Treatment of Financing Costs and Income)
(Acceptable Financial Statements) Regulations 2009 (S.I. 2009/3217S.I. 2009/3217);

(c) the Corporation Tax (Exclusion from Short-Term Loan
10Relationships) Regulations 2009 (S.I. 2009/3313S.I. 2009/3313);

(d) the Tax Treatment of Financing Costs and Income (Available
Amount) Regulations 2010 (S.I. 2010/2929S.I. 2010/2929);

(e) the Tax Treatment of Financing Costs and Income (Correction of
Mismatches) Regulations 2010 (S.I. 2010/3025S.I. 2010/3025);

(f) 15the Taxation (International and Other Provisions) Act 2010 (Part 7)
(Amendment) Regulations 2012 (S.I. 2012/3045S.I. 2012/3045);

(g) the Tax Treatment of Financing Costs and Income (Correction of
Mismatches: Partnerships and Pensions) Regulations 2012 (S.I. 2012/
3111);

(h) 20the Tax Treatment of Financing Costs and Income (Excluded
Schemes) Regulations 2013 (S.I. 2013/2892S.I. 2013/2892);

(i) the Tax Treatment of Financing Costs and Income (Change of
Accounting Standards: Investment Entities) Regulations 2015 (S.I.
2015/662).

25TIOPA 2010: other amendments

12 TIOPA 2010 is amended as follows.

13 In section 1 (overview of Act), in subsection (1)—

(a) omit the “and” at the end of paragraph (d), and

(b) after paragraph (e) insert—

(f) 30Part 9A (controlled foreign companies), and

(g) Part 10 (corporate interest restriction).”

14 In section 155 (transfer pricing: “potential advantage” in relation to United
Kingdom taxation), in subsection (6), for paragraph (a) substitute—

(a) Part 10 (corporate interest restriction),”.

15 35In section 157 (direct participation), in subsection (1)—

(a) omit the “and” at the end of paragraph (c), and

(b) after paragraph (d) insert , and

(e) in Part 10, section 463(4).”

16 In section 159 (indirect participation: potential direct participant), in
40subsection (1)—

(a) omit the “and” at the end of paragraph (c), and

(b) after paragraph (d) insert , and

(e) in Part 10, section 463(4).”

17 In section 160 (indirect participation: one of several major participants), in
45subsection (1)—

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(a) omit the “and” at the end of paragraph (c), and

(b) after paragraph (d) insert , and

(e) in Part 10, section 463(4).”

18 In section 259CB (financial instruments: hybrid or otherwise impermissible
5deduction/non-inclusion mismatches and their extent), in subsection (6), for
paragraph (e) substitute—

(e) Part 10 (corporate interest restriction).”

19 In section 259DC (hybrid transfer deduction/non-inclusion mismatches and
their extent), in subsection (5), for paragraph (d) substitute—

(d) 10Part 10 (corporate interest restriction).”

20 After section 259NE (treatment of a person who is a member of a
partnership) insert—

“Priority
259NEA Priority

15 For the purposes of this Part, the provisions of Part 10 (corporate
interest restriction) are to be treated as of no effect.”

21 (1) Chapter 3 of Part 9A (CFCs: the CFC charge gateway) is amended as follows.

(2) In section 371CE (which makes provision for determining whether Chapter
6 of Part 9A applies)—

(a) 20in subsection (2)(a), after “period” insert “(see section 371CEA)”, and

(b) omit subsections (4) and (5).

(3) After section 371CE insert—

371CEA Section 371CE: meaning of “group treasury company”

(1) This section makes provision for determining whether the CFC is a
25group treasury company in the accounting period for the purposes
of section 371CE.

(2) The CFC is a group treasury company in the accounting period if—

(a) it is a member of a worldwide group in relation to a period of
account in which the accounting period wholly or partly falls,

(b) 30throughout the accounting period—

(i) all, or substantially all, of the activities undertaken by
it consist of treasury activities undertaken for the
group, and

(ii) all, or substantially all, of its assets and liabilities
35relate to such activities, and

(c) at least 90% of its relevant income for the accounting period
is group treasury revenue.

(3) For the purposes of this section a company undertakes treasury
activities for the group if it does one or more of the following in
40relation to, or on behalf of, the group or any of its members—

(a) managing surplus deposits of money or overdrafts,

(b) making or receiving deposits of money,

(c) lending money,

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(d) subscribing for or holding shares in a company which is a UK
group company undertaking treasury activities for the group
at least 90% of whose relevant income is group treasury
revenue for its relevant accounting period,

(e) 5investing in debt securities, and

(f) hedging assets, liabilities, income or expenses.

(4) For the purposes of this section “group treasury revenue”, in relation
to a company, means revenue—

(a) arising from the treasury activities that the company
10undertakes for the group, and

(b) accounted for as such under generally accepted accounting
practice,

before any deduction (whether for expenses or otherwise).

(5) But revenue consisting of a dividend or other distribution is not
15group treasury revenue of the company unless it is from a company
that meets the conditions in subsection (3)(d).

(6) In this section—

  • “debt security” has the same meaning as in the Handbook made
    by the Financial Conduct Authority or Prudential Regulation
    20Authority under the Financial Services and Markets Act 2000
    (as the Handbook in question has effect from time to time),

  • “period of account” has the same meaning as in Part 10,

  • “relevant accounting period” has the same meaning as in Part
    10,

  • 25“relevant income”, in relation to a company, means income—

    (a)

    arising from the activities of the company, and

    (b)

    accounted for as such under generally accepted
    accounting practice,

    before any deduction (whether for expenses or otherwise),

  • 30UK group company” has the same meaning as in Part 10, and

  • “worldwide group” has the same meaning as in Part 10.”

(4) In consequence of the amendments made by this paragraph, in Schedule 47
to FA 2013, omit paragraph 17.

22 (1) Chapter 9 of Part 9A (CFCs: exemption for profits from qualifying loan
35relationships) is amended as follows.

(2) For section 371IE substitute—

371IE The “matched interest profits” exemption

(1) This section applies if—

(a) there are profits of qualifying loan relationships which are
40not exempt after sections 371IB and 371ID have been applied
to each qualifying loan relationship,

(b) the relevant corporation tax accounting period (as defined in
section 371BC(3)) of company C is a relevant accounting
period of it in relation to a period of account of a worldwide
45group,

(c) the CFC’s accounting period ends in that period of account,
and

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(d) apart from this section, the profits mentioned in paragraph
(a) would be included in the chargeable profits of the CFC.

(2) In this section “the matched interest profits” means so much of the
profits mentioned in subsection (1)(a) as remain after excluded
5credits and excluded debits are left out of account.

(3) If the aggregate net tax-interest expense of the group for the period
is nil, all of the matched interest profits are exempt.

(4) Otherwise, there is a more limited exemption if the relevant
proportion of the matched interest profits apportioned to C or other
10relevant chargeable companies exceeds the aggregate net tax-interest
expense of the group for the period.

(5) For the purposes of this section “the relevant proportion of the
matched interest profits apportioned to C or other relevant
chargeable companies” is determined as follows.

15Step 1

For each relevant chargeable company (including C) determine the
percentage (P%) of the CFC’s chargeable profits that are apportioned
to the company under step 5 of section 371BC(1).

Step 2

20For each relevant chargeable company (including C) multiply P% by
the matched interest profits.

Step 3

The sum of the amounts for each company found under step 2 is “the
relevant proportion of the matched interest profits apportioned to C
25or other relevant chargeable companies”.

(6) For the purposes of this section a company is a relevant chargeable
company if the relevant corporation tax accounting period of the
company is a relevant accounting period in relation to the period of
account of the group.

(7) 30The limited exemption is given effect by treating the matched
interest profits as equal to the amount found by multiplying the
amount that they would otherwise be by—


where—

  • 35E is the amount of the excess mentioned in subsection (4), and

  • RPMIP is the relevant proportion of the matched interest profits
    apportioned to C or other relevant chargeable companies.

(8) For the purposes of this section the aggregate net tax-interest
expense of a worldwide group for a period of account is determined
40in accordance with Part 10 (corporate interest restriction) but
without regard to debits, credits or other amounts arising from—

(a) banking business carried on by a company within the charge
to corporation tax, or

(b) insurance business carried on by a company within the
45charge to corporation tax.

(9) For the purposes of this section—

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  • “excluded credit” has the meaning given by section 386(3),

  • “excluded debit” has the meaning given by section 383(3), and

  • “period of account”, “relevant accounting period” and
    “worldwide group” have the same meanings as in Part 10.”

(3) 5In section 371IJ (claims), in subsection (6), for “the tested income amount or
the tested expense amount mentioned in section 371IE(2)” substitute “the
aggregate net tax-interest expense that is mentioned in section 371IE”.

23 (1) Chapter 19 of Part 9A (CFCs: assumed taxable total profits, assumed total
profits and the corporation tax assumptions) is amended as follows.

(2) 10In section 371SL (group relief etc), at the end insert—

(4) This section is subject to section 371SLA (corporate interest
restriction).”

(3) After section 371SL insert—

371SLA Corporate interest restriction

(1) 15This section applies for the purpose of applying Part 10 (corporate
interest restriction).

(2) Assume—

(a) that the CFC is a member of a worldwide group for a period
of account of which it would be a member if section 371SL
20were ignored, and

(b) that the CFC is the only UK group company in the period
(within the meaning of that Part).

(3) Assume also that Part 10 applies as if subsections (2) and (3) of
section 392 (interest capacity of the group: the de minimis amount)
25were omitted.”

24 In Schedule 11, at the end insert—

“Part 7 Corporate interest restriction: index of defined expressions used in
Part 10
abbreviated interest restriction return (in Part 10) 30paragraph 20
of Schedule 7A
abbreviated return election (in Part 10) paragraph 19
of Schedule 7A
accounting period (in Part 10) Chapter 2 of
35Part 2 of CTA
2009 (applied
by section 1119
of CTA 2010)
adjusted net group-interest expense of a worldwide group (in
Part 10)
section 413
40

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aggregate net tax-interest expense of a worldwide group (in
Part 10)
section 390
aggregate net tax-interest income of a worldwide group (in
Part 10)
section 390
aggregate tax-EBITDA of a worldwide group (in Part 10) 5section 405
allocated reactivation of company for period of account (in
Part 10)
paragraph 25
of Schedule 7A
allowable loss (in Part 10) TCGA 1992
(applied by
10section 1119 of
CTA 2010)
associated (in Chapter 8 of Part 10) section 449(2)
amount available for reactivation of company in period of
account (in Part 10)
paragraph 26
of Schedule 7A
available, in relation to interest allowance (in Chapter 4 of
Part 10)
15section 393
balance sheet (in Chapter 8 of Part 10) section 449(1)
chargeable gain (in Part 10) TCGA 1992
(applied by
20section 1119 of
CTA 2010)
the Commissioners (in Part 10) section 494(1)
company (in Part 10) section 1121 of
CTA 2010
company tax return (in Schedule 7A) 25paragraph 73
of Schedule 7A
consenting company (in Part 10) paragraph 10
of Schedule 7A
consolidated partnership (in Part 10) section 430
consolidated subsidiary of another entity (in Part 10) 30section 475
derivative contract (in Part 10) Part 7 of CTA
2009 (applied
by section 1119
of CTA 2010)
disallowed, in relation to tax-interest expense amount (in Part
10)
35section 378
drawn up on acceptable principles, in relation to financial
statements (in Chapter 11 of Part 10)
section 481
fair value accounting (in Part 10) section 494(1)

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fair value (in Part 10) section 494(1)
filing date, in relation to a period of account of a worldwide
group (in Part 10)
paragraph 7(5)
of Schedule 7A
finance lease (in Part 10) section 494(1)
financial asset (in Chapter 8 of Part 10) 5section 449(1)
financial statements of a worldwide group (in Part 10) section 479
fixed ratio method (in Part 10) section 397
for accounting purposes (in Part 10) section 1127(4)
of CTA 2010
full interest restriction return (in Part 10) 10paragraph 20
of Schedule 7A
generally accepted accounting practice (in Part 10) section 1127(1)
and (3) of CTA
2010
group-EBITDA (chargeable gains) election (in Part 10) 15paragraph 15
of Schedule 7A
group ratio election (in Part 10) paragraph 13
of Schedule 7A
group ratio (blended) election (in Part 10) paragraph 14
20of Schedule 7A
group ratio method (in Part 10) section 398
group ratio percentage (in Part 10) section 399
IAS financial statements (in Part 10) section 488
impairment loss (in Part 10) section 391
income (in Part 10) 25section 1119 of
CTA 2010
insurance company (in Part 10) section 141 of
FA 2012
interest allowance of a worldwide group (in Part 10) section 396
interest allowance (alternative calculation) election (in Part
10)
30paragraph 16
of Schedule 7A
interest allowance (consolidated partnerships) election (in
Part 10)
paragraph 18
of Schedule 7A
interest allowance (non-consolidated investment) election (in
Part 10)
paragraph 17
35of Schedule 7A
interest capacity of a worldwide group (in Part 10) section 392
interest reactivation cap of a worldwide group (in Part 10) section 373

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interest restriction return (in Part 10) section 494(1)
international accounting standards (in Part 10) section 1127(5)
of CTA 2010
investor in a worldwide group (in Part 10) section 404
loan relationship (in Part 10) 5Part 5 of CTA
2009 (applied
by section 1119
of CTA 2010)
loan relationships or other financing arrangements (in
Chapter 8 of Part 10)
section 449(1)
10
local authority (in Part 10) section 1130 of
CTA 2010
local authority association (in Part 10) section 1131 of
CTA 2010
member of a worldwide group (in Part 10) 15section
473(4)(a)
multi-company worldwide group (in Part 10) section
473(4)(d)
net group-interest expense of a worldwide group (in Part 10) section 410
net tax-interest expense of a company (in Part 10) 20section 389
net tax-interest income of a company (in Part 10) section 389
non-consenting company (in Part 10) paragraph 10
of Schedule 7A
non-consolidated associate of a worldwide group (in Part 10) section 429
non-consolidated subsidiary of an entity (in Part 10) 25section 475
notice (in Part 10) section 1119 of
CTA 2010
party to a loan relationship (in Part 10) section 494(2)
period of account of a worldwide group (in Part 10) section 480
profit before tax, of a worldwide group (in Chapter 7 of Part
10)
30section 416
pro-rata share of company (of total disallowed amount) (in
Part 10)
paragraph 23
of Schedule 7A
pro-rata share of accounting period (of total disallowed
amount) (in Part 10)
paragraph 24
35of Schedule 7A
provision (in relation to a public infrastructure asset) (in
Chapter 8 of Part 10)
section 436
public infrastructure asset (in Chapter 8 of Part 10) section 436

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qualifying charitable donation (in Part 10) Part 6 of CTA
2010 (applied
by section 1119
of CTA 2010)
qualifying infrastructure company (in Chapter 8 of Part 10) 5section 433
qualifying infrastructure activity (in Chapter 8 of Part 10) section 436
qualifying net group-interest expense of a worldwide group
(in Part 10)
section 414
recognised, in financial statements (in Part 10) section 489
recognised stock exchange (in Part 10) 10section 1137 of
CTA 2010
registered pension scheme (in Part 10) section 150(2)
of FA 2004
(applied by
15section 1119 of
CTA 2010)
related party (in Part 10) sections 462 to
472
related party investor (in Part 10) section 404
relevant asset (in Chapter 7 of Part 10) 20section 417
relevant accounting period (in Part 10) section 490
relevant expense amount (in Chapter 7 of Part 10) section 411
relevant income amount (in Chapter 7 of Part 10) section 411
relevant public body (in Part 10) section 491
reporting company (in Part 10) 25section 494(1)
the return period (in Part 10) section 494(1)
service concession agreement (in Part 10) section 494(1)
share, of an investor in a worldwide group (in Part 10) section 404
single-company worldwide group (in Part 10) section
30473(4)(c)
subject to interest reactivations (in Part 10) section 373
subject to interest restrictions (in Part 10) section 373
tax (in Part 10) section 1119 of
CTA 2010
tax-EBITDA of a company (in Part 10) 35section 406
tax-interest expense amount of a company (in Part 10) section 382

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tax-interest income amount of a company (in Part 10) section 385
trade (in Part 10) section 1119 of
CTA 2010
total disallowed amount of a worldwide group (in Part 10) section 373
UK generally accepted accounting practice (in Part 10) 5section 1127(2)
of CTA 2010
UK group company (in Part 10) section 492
UK property business (in Part 10) Chapter 2 of
Part 4 of CTA
102009 (applied
by section 1119
of CTA 2010)
the UK sector of the continental shelf (in Chapter 8 of Part 10) section 449(1)
the ultimate parent, of a worldwide group (in Part 10) section
15473(4)(b)
unexpired (in Chapter 4 of Part 10) section 395
United Kingdom (in Part 10) section 1170 of
CTA 2010
used (in Chapter 4 of Part 10) section 394
within the charge to corporation tax (in Part 10) 20section 1167 of
CTA 2010
wholly-owned subsidiary (in Part 10) section 494(1)
a worldwide group (in Part 10) section 473

Part 4 25Commencement and transitional provision

Commencement: new Part 10 of TIOPA

25 (1) The corporate interest restriction amendments have effect in relation to
periods of account of worldwide groups that begin on or after 1 April 2017.

(2) In this paragraph “the corporate interest restriction amendments” means the
30amendments made by Parts 1 to 3 of this Schedule, apart from those made
by paragraph 11 (repeal of Part 7 of TIOPA 2010).

(3) Any regulations made by the Treasury or Commissioners under Part 10 of
TIOPA 2010 before 1 April 2018 may have effect in relation to periods of
account of worldwide groups that begin on or after 1 April 2017.

(4) 35Sub-paragraphs (6) to (11) apply if—

(a) financial statements of a worldwide group are drawn up by or on
behalf of the ultimate parent in respect of a period that begins before,
and ends on or after, 1 April 2017,

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(b) the period in respect of which the financial statements are drawn up
is 18 months or less, and

(c) the financial statements are drawn up before the end of the period of
30 months beginning with the beginning of the period in respect of
5which they are drawn up.

(5) In sub-paragraphs (6) to (11)

(a) “the group’s actual financial statements” means the financial
statements mentioned in sub-paragraph (4);

(b) “the straddling period of account” means the period in respect of
10which those financial statements are drawn up.

(6) For the purposes of Part 10 of TIOPA 2010, the group’s actual financial
statements are treated as not having been drawn up.

(7) Instead, financial statements of the worldwide group are treated for those
purposes as having been drawn up in respect of each of the following
15periods—

(a) the period beginning at the time the straddling period of account
begins and ending with 31 March 2017, and

(b) the period beginning with 1 April 2017 and ending at the time the
straddling period of account ends.

(8) 20Where condition C or D in section 481 of TIOPA 2010 is met in relation to the
group’s actual financial statements, the financial statements treated as
drawn up by sub-paragraph (7) are treated as drawn up in accordance with
the generally accepted accounting principles and practice with which the
group’s actual financial statements were drawn up.

(9) 25Where neither of those conditions is met in relation to the group’s actual
financial statements, the financial statements treated as drawn up by sub-
paragraph (7) are IAS financial statements.

(10) Where, for the purpose of determining amounts recognised in the financial
statements treated as drawn up by sub-paragraph (7), it is expedient to
30apportion any amount that is recognised in the group’s actual financial
statements, the apportionment is to be made in accordance with section 1172
of CTA 2010 (apportionment on a time basis).

(11) But if it appears that apportionment in accordance with that section would
work unjustly or unreasonably, the apportionment is to be made on a just
35and reasonable basis.

(12) Expressions used in this paragraph and in Part 10 of TIOPA 2010 have the
same meaning in this paragraph as they have in that Part.

Commencement: repeal of Part 7 of TIOPA 2010

26 (1) The repeals and revocations made by paragraph 11 of this Schedule have
40effect in relation to periods of account of the worldwide group that begin on
or after 1 April 2017.

(2) Sub-paragraphs (4) to (10) apply if financial statements of the worldwide
group are drawn up in respect of a period that begins before, and ends on or
after, 1 April 2017.

(3) 45In sub-paragraphs (4) to (10)

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(a) “the group’s actual financial statements” means the financial
statements mentioned in sub-paragraph (2);

(b) “the straddling period of account” means the period in respect of
which those financial statements are drawn up.

(4) 5For the purposes of Part 7 of TIOPA 2010, the group’s actual financial
statements are treated as not having been drawn up.

(5) Instead, financial statements of the worldwide group are treated for those
purposes as having been drawn up in respect of each of the following
periods—

(a) 10the period beginning at the time the straddling period of account
begins and ending with 31 March 2017, and

(b) the period beginning with 1 April 2017 and ending at the time the
straddling period of account ends.

(6) Where condition B, C or D in regulation 2 of the Acceptable Financial
15Statements Regulations is met in relation to the group’s actual financial
statements, the financial statements treated as drawn up by sub-paragraph
(5) are treated as drawn up in accordance with the generally accepted
accounting principles and practice with which the group’s actual financial
statements were drawn up.

(7) 20Where none of those conditions is met in relation to the group’s actual
financial statements, the financial statements treated as drawn up by sub-
paragraph (5) are IAS financial statements.

(8) Where, for the purpose of determining amounts recognised in the financial
statements treated as drawn up by sub-paragraph (5), it is expedient to
25apportion any amount that is recognised in the group’s actual financial
statements, the apportionment is to be made in accordance with section 1172
of CTA 2010 (apportionment on a time basis).

(9) But if it appears that apportionment in accordance with that section would
work unjustly or unreasonably, the apportionment is to be made on a just
30and reasonable basis.

(10) In sub-paragraph (6), “the Acceptable Financial Statements Regulations”
means the Corporation Tax (Tax Treatment of Financing Costs and Income)
(Acceptable Financial Statements) Regulations 2009 (S.I. 2009/3217S.I. 2009/3217).

(11) Expressions used in this paragraph and in Part 7 of TIOPA 2010 have the
35same meaning in this paragraph as they have in that Part.

Time limits for elections relating to financial statements of a worldwide group

27 (1) In section 484 of TIOPA 2010, subsection (5) (which requires the date
specified in an election under subsection (3) of that section to be on or after
the day on which the election is made) does not apply in relation to an
40election made on or before 31 March 2018.

(2) In section 486 of that Act, subsection (5)(a) (which requires an election under
that section to be made before the end-day of the new period of account)
does not apply in relation to an election made on or before 31 March 2018.

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Time limit relating to appointment of reporting company or filing interest restriction return

28 (1) Paragraph 1(4)(a) of Schedule 7A to TIOPA 2010 (notice of the appointment
of reporting company ineffective if given outside the period specified in that
provision) does not apply to a notice that—

(a) 5is given on or before 31 March 2018, and

(b) would otherwise be of no effect by reason only of the expiry of the
period specified in that provision.

(2) Paragraph 2(4)(a) of that Schedule (notice of the revocation of the
appointment of reporting company ineffective if given outside the period
10specified in that provision) does not apply to a notice that—

(a) is given on or before 31 March 2018, and

(b) would otherwise be of no effect by reason only of the expiry of the
period specified in that provision.

(3) Where the date determined under paragraph 7(5) of that Schedule as the
15filing date in relation to a period of account of a worldwide group would
(apart from this sub-paragraph) be a date before 30 June 2018, that provision
has effect as if it provided for the filing date in relation to the period to be 30
June 2018.

Change of accounting policy

29 (1) 20For the purposes of Part 10 of TIOPA 2010 a debit or credit to which this
paragraph applies is to be ignored.

(2) This paragraph applies to a debit or credit if—

(a) it is brought into account under the Loan Relationships and
Derivative Contracts (Change of Accounting Practice) Regulations
252004 (S.I. 2004/3271S.I. 2004/3271), and

(b) the later period, in relation to the change of accounting policy to
which the debit or credit relates, begins before 1 April 2017.

(3) In sub-paragraph (2) “the later period” has the same meaning as in the
regulations mentioned in that sub-paragraph.

30Adjustments under Schedule 7 to F(No.2)A 2015

30 (1) For the purposes of Part 10 of TIOPA 2010 a debit or credit to which this
paragraph applies is to be ignored.

(2) This paragraph applies to a debit or credit if—

(a) it is brought into account for the purposes of Part 5 of CTA 2009 by
35virtue of paragraphs 115 and 116 of Schedule 7 to F(No.2)A 2015
(transitional adjustments relating to loan relationships), or

(b) it is brought into account for the purposes of Part 7 of CTA 2009 by
virtue of paragraphs 119 and 120 of that Schedule (transitional
adjustments relating to derivative contracts).

40Power to make elections under Disregard Regulations for pre-1 April 2020 derivative contracts

31 (1) A company which is a UK group company of a worldwide group on 1 April
2017 may elect for the Disregard Regulations to have effect as if—

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(a) the company had made an election (“the disregard election”) under
regulation 6A of those Regulations for the purposes of regulation
6(1)(a) of those Regulations,

(b) the disregard election applied to regulations 7, 8 and 9 of those
5Regulations, and

(c) the disregard election had effect in relation to derivative contracts
entered into by the company before 1 April 2020.

(2) The election has effect for the calculation under Part 10 of TIOPA 2010 of—

(a) the tax-interest expense amounts and tax-interest income amounts of
10the company and any relevant transferee company, and

(b) the adjusted corporation tax earnings under section 406 of that Act of
the company and any relevant transferee company.

(3) A company is a “relevant transferee company” if regulation 6B or 6C of the
Disregard Regulations applies in relation to the company as the transferee
15mentioned in the regulation (on the assumption that an election has been
made before the transfer under this paragraph).

(4) An election under this paragraph has effect only if every company which
was a UK group company of the worldwide group on 1 April 2017 (other
than one which was dormant on that date or at the time the election is made)
20also makes an election under this paragraph.

(5) An election under this paragraph—

(a) must be made before 1 April 2018, and

(b) is irrevocable.

(6) Section 457 of TIOPA 2010 is to apply in relation to debits resulting from an
25election under this paragraph.

(7) In this paragraph “the Disregard Regulations” means the Loan
Relationships and Derivative Contracts (Disregard and Bringing into
Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256S.I. 2004/3256).

(8) Expressions used in this paragraph and in Part 10 of TIOPA 2010 have the
30same meaning in this paragraph as they have in that Part.

Qualifying infrastructure companies