Paragraph 26 F1

United Kingdom

(1)

This paragraph applies for the purposes of this Part of this Act.

(2)

The “amount available for reactivation” of a company in a period of account of a worldwide group (“the relevant worldwide group”) is—

(a)

the amount determined under sub-paragraph (3), or

(b)

if lower, the company's interest reactivation cap (see sub-paragraph (5)).

(3)

The amount referred to in sub-paragraph (2)(a) is—

A + B - C + D - E

where—

A is the total of the disallowed tax-interest expense amounts (if any) that are brought forward to the specified accounting period from earlier accounting periods;

B is the total of the tax-interest expense amounts (if any) that the company is required to leave out of account in the specified accounting period as a result of the operation of this Part of this Act in relation to a period of account of the worldwide group before the period of account;

C is the total of the disallowed tax-interest expense amounts (if any) that the company is required to bring into account in the specified accounting period as a result of the operation of this Part of this Act in relation to a period of account of the worldwide group before the period of account;

D is the total of the tax-interest expense amounts (if any) that the company is required to leave out of account in the specified accounting period as a result of the operation of this Part of this Act in relation to a period of account of a worldwide group of which the company was a member before it became a member of the relevant worldwide group;

E is the total of the disallowed tax-interest expense amounts (if any) that the company is required to bring into account in the specified accounting period as a result of the operation of this Part of this Act in relation to a period of account of a worldwide group of which the company was a member before it became a member of the relevant worldwide group.

(4)

In sub-paragraph (3) “the specified accounting period” means—

(a)

the earliest relevant accounting period of the company, or

(b)

where the company became a member of the relevant worldwide group during the period of account, the earliest relevant accounting period of the company in which it was a member of the group.

(5)

For the purposes of sub-paragraph (2)(b) “the interest reactivation cap” of the company is—

A \times B

where—

A is the interest reactivation cap of the worldwide group in the period of account;

B is the proportion of the period of account in which the company is a UK group company.

Annotations

Textual amendments

F1: Sch. 7A inserted (with effect in accordance with Sch. 5 para. 25(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 2 (with Sch. 5 para. 28)