What was the purpose of section 283 of TIOPA 2010?

Section 283 granted HMRC the power to make regulations prescribing how statements of allocated disallowances should be prepared and submitted. Under the worldwide debt cap rules, where a UK group's financing costs exceeded the group's external finance costs, the excess was disallowed and allocated among UK group companies. This section governed the format and delivery of those allocation statements.

When was section 283 of TIOPA 2010 repealed and what replaced it?

Section 283 was repealed by section 20 and Schedule 5 of Finance (No. 2) Act 2017, along with the entire Part 7 worldwide debt cap regime. The repeal took effect for periods of account of worldwide groups beginning on or after 1 April 2017. It was replaced by the corporate interest restriction rules, which have their own reporting requirements including the interest restriction return.

Do UK groups still need to prepare statements of allocated disallowances?

No. Since the repeal of the worldwide debt cap regime, groups no longer prepare statements of allocated disallowances. Instead, they must comply with the corporate interest restriction regime, which uses a fixed ratio rule and an optional group ratio rule to determine maximum tax-deductible interest. Any restriction is reported through an interest restriction return.

How did the allocation of disallowed amounts work under the old worldwide debt cap rules?

Under the old rules, where a worldwide group's UK tax-deductible financing costs exceeded its actual external finance costs, the excess was disallowed. This disallowed amount was then allocated among the relevant UK group companies. HMRC had power under section 283 to prescribe through regulations how the statement setting out each company's share of the disallowance should be prepared and submitted.

Taxation (International and Other Provisions) Act 2010 section 283

Power to make regulations about statement of allocated disallowances

Section 283 granted HMRC the power to make regulations prescribing how statements of allocated disallowances should be prepared and submitted under the former worldwide debt cap rules. This section has been repealed.

Section 283 was part of Part 7 of TIOPA 2010, which dealt with the worldwide debt cap — a regime that limited the amount of tax-deductible finance expense for UK groups that were part of large worldwide groups.
The section gave HMRC a regulation-making power concerning the format and content of statements showing how disallowed amounts were allocated among group companies.
The entire Part 7 worldwide debt cap regime, including this section, was repealed by Finance (No. 2) Act 2017 and replaced by the corporate interest restriction rules.
The repeal took effect for periods of account of worldwide groups beginning on or after 1 April 2017.

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