Finance Act 2009

SCHEDULE 15 Tax treatment of financing costs and income

Section 35 Part 1 Introduction Overview 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 2 Application of this Schedule Application of Schedule 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK net debt of the worldwide group for period of account of worldwide group 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net debt of a company 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Worldwide gross debt of worldwide group for period of account of worldwide group 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References to amounts disclosed in balance sheet of relevant group company 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying financial services groups 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying activities 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lending activities and activities ancillary to lending activities 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance activities and insurance related activities 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relevant dealing in financial instruments 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK trading income of the worldwide group 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Worldwide trading income of the worldwide group 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign currency accounting 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 3 Disallowance of deductions Application of Part and meaning of “total disallowed amount” 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “company to which this Part applies” 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointment of authorised company for relevant period of account 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “the reporting body” 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated disallowances: submission 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated disallowances: submission of revised statement 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated disallowances: requirements 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated disallowances: effect 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company tax returns 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to make regulations about statement of allocated disallowances 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Failure of reporting body to submit statement of allocated disallowances 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Powers to make regulations in relation to reductions required under paragraph 25 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 4 Exemption of financing income Application of Part and meaning of “total disallowed amount” 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “company to which this Part applies” 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointment of authorised company for relevant period of account 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “the reporting body” 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated exemptions: submission 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated exemptions: submission of revised statement 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated exemptions: requirements 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of allocated exemptions: effect 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company tax returns 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to make regulations about statement of allocated exemptions 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Failure of reporting body to submit statement of allocated exemptions 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to make regulations in relation to reductions required under paragraph 37 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balancing payments between group companies: no charge to, or relief from, tax 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 5 Intra-group financing income where payer denied deduction Exemption from tax for certain financing income received from certain EEA companies 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “relevant associate” 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “tax-resident” and “EEA territory” 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying EEA tax relief for payment in the current period or a previous period 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying EEA tax relief for payment in future period 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References to tax of a territory 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financing income amounts of a company 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 6 Anti-avoidance Schemes involving manipulation of rules in Part 2 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schemes involving manipulation of rules in Parts 3 and 4 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “relevant net deduction” 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of amounts 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “carried-back amount” and “carried-forward amount” 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schemes involving manipulation of rules in Part 5 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “scheme” and “excluded scheme” 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 7 “Financing expense amount” and “financing income amount” The financing expense amounts of a company 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The financing income amounts of a company 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of paragraphs 54 and 55 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group treasury companies 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate investment trusts 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies engaged in oil extraction activities 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intra-group short-term finance: financing expense 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intra-group short-term finance: financing income 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short-term loan relationships 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stranded deficits in non-trading loan relationships: financing expense 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stranded deficits in non-trading loan relationships: financing income 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stranded management expenses in non-trading loan relationships: financing expense 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stranded management expenses in non-trading loan relationships: financing income 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charities 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Educational and public bodies 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of paragraphs 57 to 68 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 8 The “tested expense amount” and “tested income amount” The tested expense amount 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The tested income amount 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Companies with net financing deduction or net financing income that is small 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 9 The “available amount” The available amount 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group members with income from oil extraction subject to particular tax treatment in UK 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group members with income from shipping subject to particular tax treatment in UK 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Group members with income from property rental subject to particular tax treatment in UK 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of accounting expressions used in this Part 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 10 Other interpretative provisions The worldwide group 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “group” 79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “ultimate parent” 80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “corporate entity” 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “relevant non-corporate entity” 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of entities stapled to corporate entities or relevant non-corporate entities 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of business combinations 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “large” in relation to a group 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “UK group company” and “relevant group company” 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial statements of the worldwide group 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-compliant financial statements of worldwide group 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-existent financial statements of worldwide group 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References to amounts disclosed in financial statements 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Translation of amounts disclosed in financial statements into sterling 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expressions taking their meaning from international accounting standards 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “relevant accounting period” 93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “the Commissioners” and “HMRC” 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 11 Consequential amendments and commencement Consequential amendments 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commencement 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anti-avoidance: change of period of account of worldwide group 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provision 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .