Taxation (International and Other Provisions) Act 2010 section 260

Introduction

Section 260 introduces the chapter dealing with the tax treatment of financing costs and income where a worldwide group has excessive debt in the UK relative to its overall debt levels.

• This section introduces a set of rules (known as the worldwide debt cap) that limit the amount of tax-deductible financing costs for UK members of large worldwide groups.
• The rules apply where the total UK financing costs of a group exceed the group's worldwide financing costs, meaning the UK part of the group is carrying a disproportionate share of debt.
• The chapter contains provisions defining key terms, setting out how to calculate the relevant amounts, and determining how any necessary restriction is allocated among UK group companies.
• These rules were subsequently amended by the Finance (No. 2) Act 2017 as part of wider reforms to corporate interest deductibility.