Finance Bill (HC Bill 116)

(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—

(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.

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).””

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);

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;

(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)—

(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,

(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),

• 30“UK 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

(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—

Finance BillPage 450

• “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

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,

(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)—

(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.

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 120 and 121 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—

(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

32 (1) In the case of an accounting period of a company beginning before 1 April
2018, the company may make an election under section 433 or 444 of TIOPA
2010 before that date.

(2) 35Companies making an election under section 435 of TIOPA 2010 before 1
April 2018 may specify a date in the election from which it has effect which
is before the date on which the election is made.

33 (1) This paragraph applies in the case of an accounting period of a company
beginning before 1 April 2018 (“the transitional accounting period”) if—

(a) 40the company does not meet the public infrastructure assets test, or
the public infrastructure income test, for the transitional accounting
period, but

(b) in the case of each test that it does not meet as mentioned in
paragraph (a), the company would meet the test for an accounting
45period that includes that date and is at least 3 months long.

(2) For the purposes of section 433 of TIOPA 2010 the company is treated as
meeting the test (or tests) for the transitional accounting period.

(3) For the purposes of sections 438 and 440 to 442 of TIOPA 2010 such
adjustments to the relevant amounts are to be made as are just and
5reasonable, having regard to the extent to which, but for this paragraph, the
company would not have met the public infrastructure assets test, or the
public infrastructure income test, for the transitional accounting period.

(4) For this purpose “the relevant amounts” means—

(a) amounts that would otherwise have qualified as exempt amounts
10under section 438,

(b) amounts that would otherwise have been treated as mentioned in
section 440,

(c) the tax-EBITDA of the company, and

(d) the amounts that would otherwise have been left of account as a
15result of section 442.

(5) Expressions used in this paragraph and in section 433 of TIOPA 2010 have
the same meaning in this paragraph as they have in that section.

Counteracting effect of avoidance arrangements

34 (1) This paragraph applies in relation to section 461 of TIOPA 2010.

(2) 20Section 461 applies in relation to arrangements whenever entered into.

(3) Arrangements are not “relevant avoidance arrangements” for the purposes
of section 461 so far as—

(a) they secure that an amount paid before 1 April 2017 is brought into
account in an accounting period ending before that date, and

(b) 25directly in consequence of the amount being brought into account as
mentioned in paragraph (a), there is a reduction in the tax-interest
expense amounts that could otherwise have been left out of account
under Part 10 of TIOPA 2010.