Finance Bill (HC Bill 116)

enquiries (so that a worldwide group could be either the
original group or the existing group),

an officer of Revenue and Customs must select the company that,
in the officer’s opinion, ought to be the reporting company in
5relation to the new group.

(8) For this purpose an enquiry is “open” in relation to an interest
restriction return if no closure notice has been given in relation to
the enquiry.

Appeal against closure notice or notice under paragraph 51

52 (1) 10If a closure notice —

(a) is given to a company under paragraph 47, and

(b) contains a statement under paragraph 49(2)(b),

the company may appeal against the statement.

(2) If a notice is given to a company under paragraph 51, the company
15may appeal against the notice.

(3) Notice of appeal under this paragraph must be given—

(a) within 30 days after the notice was given to the company,

(b) to the officer of Revenue and Customs by whom the notice
in question was given.

20New groups without existing reporting company

53 (1) This paragraph applies if—

(a) a closure notice is given to a company under paragraph 47,

(b) a period of account of a worldwide group (“the new
group”) is designated under paragraph 47(4) in the closure
25notice,

(c) the company is not a member of the new group at any time
in that period of account, and

(d) paragraph 51 does not apply.

(2) An officer of Revenue and Customs may appoint a company to be
30the reporting company of the new group in relation to that period.

(3) The appointment—

(a) must be of a company that was a UK group company at
any time during that period and was not dormant
throughout that period, and

(b) 35must be made before the end of the period of 3 months
beginning with the day on which the closure notice is
given to the company.

Matters required to be done on a “just and reasonable” basis

54 (1) This paragraph applies if—

(a) 40anything is required to be done under any provision of this
Part of this Act on a “just and reasonable” basis,

(b) in preparing an interest restriction return the reporting
company adopts a particular basis for dealing with that
thing, and

(c) notice of enquiry is given into the return.

(2) 5An officer of Revenue and Customs may determine that, in
preparing the return, a different just and reasonable basis should
have been adopted for dealing with that thing.

(3) A closure notice given in respect of the return must require the
reporting company to whom the notice is given to revise the
10return to give effect to that determination.

(4) The officer’s determination may be questioned on an appeal
under paragraph 52 on the ground that the basis to be adopted is
not just and reasonable (but not on any other ground).

References to a reporting company where replaced

55 (1) 15This paragraph applies where—

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

(b) another reporting company is appointed in place of that
company and the appointment has effect in relation to that
20period of account.

(2) Any reference in this Part of this Schedule (however expressed) to
the reporting company in relation to that period of account at any
time is to the company which is the reporting company at that
time in relation to that period of account.

25Part 5 Determinations by officers of Revenue and Customs

Power of Revenue and Customs to make determinations where no return filed etc

56 (1) This paragraph applies where—

(a) an officer of Revenue and Customs considers that a
30worldwide group was subject to interest restrictions in a
period of account of the group (“the relevant period of
account”),

(b) the determination date has passed, and

(c) condition A, B or C is met.

(2) 35In this paragraph “the determination date”, in relation to a period
of account of a worldwide group, means—

(a) where the appointment of a reporting company has effect
in relation to the period of account, the filing date in
relation to the period (see paragraph 7(5));

(b) 40otherwise, the end of the period of 12 months beginning
with the end of the period of account.

(3) Condition A is that no appointment of a reporting company has
effect in relation to the relevant period of account.

(4) Condition B is that—

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

(b) no interest restriction return has been submitted for the
5period.

(5) Condition C is that—

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

(b) an interest restriction return has been submitted for the
10period, and

(c) the return does not comply with the requirements of
paragraph 20(3) (for example by including inaccurate
figures).

(6) An officer of Revenue and Customs may determine, to the best of
15the officer’s information and belief—

(a) a company’s pro-rata share of the total disallowed amount
of the group for the relevant period of account, and

(b) in relation to each relevant accounting period of the
company, the accounting period’s pro-rata share of the
20total disallowed amount.

(7) If, as a result of the determination, an accounting period’s pro-rata
share of the total disallowed amount is not nil, the company must
leave out of account tax-interest expense amounts in that period
that, in total, equal that pro-rata share.

(8) 25A notice of determination under this paragraph must be given to
the company, and to the reporting company, stating the date on
which the determination is made.

(9) No determination under this paragraph may be made after the
end of the period of 3 years beginning with the determination
30date.

Time limit: interest restriction return following determination under paragraph 56

57 (1) Sub-paragraph (2) applies where—

(a) a notice of determination under paragraph 56 is given to a
company, and

(b) 35at the time the notice is given, no interest restriction return
for the relevant period of account has been submitted
under paragraph 7.

(2) Despite the passing of the time limit in paragraph 7(6), an interest
restriction return for the relevant period of account submitted
40under paragraph 7 has effect if it is received before the end of the
period of 12 months beginning with the date on which the notice
is given.

(3) Sub-paragraph (4) applies where—

(a) a notice of determination under paragraph 56 is given to a
45company, and

(b) at the time the notice is given, an interest restriction return
for the relevant period of account has been submitted
under paragraph 7.

(4) Despite the passing of the time limit in paragraph 8(3), an interest
5restriction return for the relevant period of account submitted
under paragraph 8 has effect if it is received before the end of the
period of 12 months beginning with the date on which the notice
is given.

(5) In this paragraph “the relevant period of account” means the
10period of account to which the determination in question relates.

Power of Revenue and Customs to make determinations following enquiry

58 (1) This paragraph applies where—

(a) as a result of a closure notice given under paragraph 47
(closure notice in respect of a return subject to enquiry), a
15company is required to submit an interest restriction
return (“the return”) in relation to a worldwide group,

(b) the worldwide group is subject to interest restrictions in
the return period, and

(c) condition A or B is met.

(2) 20Condition A is that the time limit in paragraph 50(2) for
submission of the return has passed without the return being
received by an officer of Revenue and Customs.

(3) Condition B is that—

(a) the return has been received by an officer of Revenue and
25Customs before the time limit in paragraph 50(2), and

(b) the officer considers that the return does not comply with
the requirements of the closure notice.

(4) An officer of Revenue and Customs may determine, to the best of
the officer’s information and belief—

(a) 30a company’s pro-rata share of the total disallowed amount
of the group for the period of account in question, and

(b) in relation to each relevant accounting period of the
company, the accounting period’s pro-rata share of the
total disallowed amount.

(5) 35If, as a result of the determination, an accounting period’s pro-rata
share of the total disallowed amount is not nil, the company must
leave out of account tax-interest expense amounts in that period
that, in total, equal that pro-rata share.

(6) A notice of determination under this paragraph must be given to
40the company, and to the reporting company, stating the date on
which the determination is made.

(7) No determination under this paragraph may be made after the
end of the period of 3 months beginning with the end of the period
mentioned in paragraph 50(2).

Appeal against determination under paragraph 58

59 (1) If a notice of determination under paragraph 58 is given to a
company, the company may appeal against the notice.

(2) The only ground on which an appeal under this paragraph may
5brought is that the determination is inconsistent with the
requirements of the closure notice to which it relates.

(3) Notice of appeal under this paragraph must be given—

(a) within 30 days after the notice of determination was given
to the company,

(b) 10to the officer of Revenue and Customs by whom the notice
of determination was given.

Part 6 Information powers exercisable by members of group

Provision of information to and by the reporting company

60 (1) 15The reporting company in relation to a period of account of a
worldwide group may, by notice, require a company that was a
UK group company at any time during the period to provide it
with information that it needs for the purpose of exercising
functions under or by virtue of this Part of this Act.

(2) 20A notice under sub-paragraph (1) must specify the information to
be provided.

(3) The duty to comply with a notice under sub-paragraph (1) is
enforceable by the reporting company.

(4) As soon as reasonably practicable after submitting an interest
25restriction return to an officer of Revenue and Customs under any
provision of this Schedule, the reporting company must send a
copy of it to each company that was a UK group company at any
time during the period of account.

(5) If a reporting company receives a closure notice under paragraph
3047, the reporting company must, as soon as reasonably practicable,
send a copy of the notice to every company that was a UK group
company at any time during the period of account that was subject
to the enquiry.

(6) The duty to comply with sub-paragraph (4) or (5) is enforceable by
35any person to whom the duty is owed.

Provision of information between members of group where no reporting company
appointed

61 (1) This paragraph applies where condition A or B is met in relation
to a period of account of a worldwide group.

(2) 40Condition A is that—

(a) no appointment of a reporting company has effect in
relation to the period of account, and

(b) as a result of sub-paragraph (4)(a) of paragraph 1, an
appointment of a reporting company under that
paragraph that has effect in relation to the relevant period
of account is no longer possible.

(3) 5Condition B is that—

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

(b) a full interest restriction return has not been submitted in
accordance with this Part for the period, and

(c) 10the filing date in relation to the period has passed (see
paragraph 7(5)).

(4) A company that was a UK group company at any time during the
period of account may, by notice, require any other such company
to provide it with information that it needs for the purpose of
15determining whether, or the extent to which, it is required to leave
tax-interest expense amounts out of account, or bring them into
account, under this Part of this Act.

(5) A notice under sub-paragraph (4) must specify the information to
be provided.

(6) 20The duty to comply with a notice under sub-paragraph (4) is
enforceable by the company that gives the notice.

Part 7 Information powers exercisable by officers of Revenue and Customs

Power to obtain information and documents from members of worldwide group

62 (1) 25An officer of Revenue and Customs may, by notice, require a
group member—

(a) to provide information, or

(b) to produce a document,

if the information or document is reasonably required by the
30officer for the purpose of checking an interest restriction return
for, or exercising any of the powers under this Part of this Act in
relation to, a period of account of a worldwide group.

(2) For the purposes of this Part of this Schedule a person is a “group
member” if, in the opinion of an officer of Revenue and Customs,
35the person is or might be a member of the worldwide group at any
time in the period of account.

(3) A group member may (subject to the operation of any provision of
Part 4 of Schedule 36 to FA 2008 as applied by paragraph 66(1) of
this Schedule) be required to provide information, or produce a
40document, that relates to one or more other group companies.

(4) A notice under this paragraph may be given to a person even if the
person is not within the charge to corporation tax or income tax.

(5) A notice under this paragraph may specify or describe the
information or documents to be provided or produced.

Power to obtain information and documents from third parties

63 (1) An officer of Revenue and Customs may, by notice, require a third
party—

(a) to provide information, or

(b) 5to produce a document,

if the information or document is reasonably required by the
officer for the purpose of checking an interest restriction return
for, or exercising any of the powers under this Part of this Act in
relation to, a period of account of a worldwide group.

(2) 10A person is a “third party” if the person is not a group member at
any time in the period of account.

(3) A notice may not be given under this paragraph unless—

(a) a company which is a UK group company of the group at
any time in the period of account agrees to the giving of the
15notice, or

(b) on an application made by an officer of Revenue and
Customs, the tribunal approves the giving of the notice.

(4) The tribunal may not approve the giving of a notice to a third
party unless—

(a) 20the tribunal is satisfied that, in the circumstances, the
officer giving the notice is justified in doing so, and

(b) either the requirements of sub-paragraph (5) are met or the
tribunal is satisfied that it is appropriate to dispense with
meeting those requirements because to meet them might
25prejudice the assessment or collection of tax.

(5) The requirements in this sub-paragraph are met if—

(a) the third party has been told that the information or
documents referred to in the notice are required,

(b) the third party has been given a reasonable opportunity to
30make representations to an officer of Revenue and
Customs,

(c) the tribunal has been given a summary of any
representations made by the third party, and

(d) a company which is a UK group company of the group at
35any time in the period of account has been given a
summary of the reasons why the information and
documents are required.

(6) Sub-paragraph (5)(d) does not apply if an officer of Revenue and
Customs has insufficient information to identify a company
40mentioned in that paragraph.

(7) No notice of the application for the approval of the tribunal needs
to be given to the third party by an officer of Revenue and
Customs.

(8) A notice under this paragraph to the third party must give details
45of the worldwide group unless—

(a) the notice is approved by the tribunal, and

(b) the tribunal is satisfied that no details should be given
because to do so might seriously prejudice the assessment
or collection of tax.

(9) An officer of Revenue and Customs must give a copy of a notice
5under this paragraph to a company which is a UK group company
of the group at any time in the period of account unless—

(a) the tribunal has approved the notice and is satisfied that no
copy should be given because to do so might prejudice the
assessment or collection of tax, or

(b) 10an officer of Revenue and Customs has insufficient
information to identify such a company.

(10) A decision of the tribunal under this paragraph is final (despite the
provisions of sections 11 and 13 of the Tribunals, Courts and
Enforcement Act 2007).

(11) 15A notice under this paragraph—

(a) may specify or describe the information or documents to
be provided or produced, and

(b) if given with the approval of the tribunal, must state that
fact.

20Notices following submitted interest restriction returns

64 (1) The general rule is that, if an interest restriction return for a period
of account of a worldwide group has been received by an officer
of Revenue and Customs, a notice under paragraph 62 or 63 may
not be given in relation to the period of the account of the group.

(2) 25But the general rule does not apply if—

(a) a notice of enquiry has been given in respect of the return,
and

(b) the enquiry has not been completed.

Appeals

65 (1) 30A group member may appeal against a notice under paragraph 62.

(2) A person to whom a notice is given under paragraph 63 in a case
where the tribunal has not approved the giving of the notice may
appeal against the notice on the ground that it would be unduly
onerous to comply with it.

(3) 35No appeal may be made under this paragraph in relation to a
requirement to provide any information, or produce any
documents, that forms part of the statutory records of any
company which is a UK group company of the group at any time
in the period of account.

(4) 40“Statutory records” has the same meaning given by paragraph 62
of Schedule 36 to FA 2008.

(5) In this Part of this Schedule references to an appeal against a notice
include an appeal against a requirement of the notice.

Application of provisions of Schedule 36 to FA 2008

66 (1) The following provisions of Schedule 36 to FA 2008 (information
and inspection powers) apply in relation to notices under
paragraph 62 or 63—

(a) 5paragraph 7 (complying with notices),

(b) paragraph 8 (producing copies of documents),

(c) paragraph 15 (power to copy documents),

(d) paragraph 16 (power to remove documents),

(e) paragraph 18 (documents not in person’s possession or
10power),

(f) paragraph 19 (types of information),

(g) paragraph 20 (old documents),

(h) paragraph 23 (privileged communications),

(i) paragraphs 24 to 27 (auditors and tax advisers),

(j) 15every paragraph contained in Part 7 (penalties),

(k) every paragraph contained in Part 8 (offence), and

(l) paragraph 56 (application of provisions of TMA 1970).

(2) Paragraph 32 of Schedule 36 to FA 2008 (procedure on appeals)
applies in relation to an appeal under this Part of this Schedule
20against a notice under this Part of this Schedule.

References to checking an interest restriction return etc

67 (1) For the purposes of this Part of this Schedule references to
checking an interest restriction return include—

(a) determining whether or not an interest restriction return
25should be submitted for a period of account of a
worldwide group,

(b) determining whether or not a worldwide group is, or may
be, subject to interest restrictions in a period of account,
(and, if so, determining the total disallowed amount of the
30group),

(c) determining the membership of a worldwide group (or
determining the members that are UK group companies),
and

(d) determining any other question that is relevant to the
35operation of this Part of this Schedule in relation to an
interest restriction return or anything required to be
included in it.

(2) For the purposes of this Part of this Schedule references to a
worldwide group include one that an officer of Revenue and
40Customs suspects may exist.

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.