Legislation – Finance (No. 2) Act 2023

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Schedules

Schedule 3Corporate interest restriction etc.

Part 1Amendments to TIOPA 2010

Adjusted net group-interest expense: debits referable to times before UK property business etc carried on

8 (1)

Section 413 (adjusted net group-interest expense) is amended as follows.

(2)

In subsection (3) (upward adjustment), after paragraph (c) insert—

“(ca)

an amount in respect of a loan relationship that is brought into account by a member of the group, for a relevant accounting period in relation to the period of account, under section 330ZA CTA 2009 (debits referable to times before UK property business etc carried on) so far as that amount has not been included in the adjusted net group-interest expense of the group for any earlier period of account;

(cb)

an amount in respect of a relevant derivative contract that would be brought into account by a member of the group, for a relevant accounting period in relation to the period of account, under section 607ZA of CTA 2009, if an election under regulation 6A of the Disregard Regulations (as defined in section 421) had effect in relation to the contract, so far as the relevant amount has not been included in the adjusted net group-interest expense of the group for any earlier period of account;

(cc)

a relevant income amount in respect of a loan relationship or a relevant derivative contract to which a member of the group is a party that—

(i)

is recognised in the financial statements of the group for the period,

(ii)

is not brought into account by a member of the group, for a relevant accounting period in relation to the period of account, and

(iii)

is expected to be brought into account, or (in the case of a relevant derivative contract) would, if an election under regulation 6A of the Disregard Regulations had effect in relation to the contract, be expected to be brought into account, by a member of the group, for another accounting period, under section 330ZA or section 607ZA of CTA 2009;”.

(3)

In subsection (4) (downward adjustment), after paragraph (c) insert—

“(ca)

a relevant expense amount, in respect of a loan relationship or a relevant derivative contract to which a member of the group is a party, that—

(i)

is recognised in the financial statements of the group for the period,

(ii)

is not brought into account by a member of the group, for a relevant accounting period in relation to the period of account, and

(iii)

is expected to be brought into account, or (in the case of a relevant derivative contract) would, if an election under regulation 6A of the Disregard Regulations had effect in relation to the contract, be expected to be brought into account, by a member of the group, for another accounting period, under section 330ZA or section 607ZA of CTA 2009;”.

(4)

At the end insert—

“(7)

Subsection (8) applies, unless the reporting company elects otherwise, in relation to a period of account of a worldwide group—

(a)

ending on or after 6 April 2020, and

(b)

beginning before 1 April 2023.

(8)

In relation to the period of account—

(a)

no amount within any of paragraphs (ca) to (cc) of subsection (3) is to be treated as an “upward adjustment”, and

(b)

no amount within paragraph (ca) of subsection (4) is to be treated as a “downward adjustment”.”