What was the purpose of section 286 of the Taxation (International and Other Provisions) Act 2010?

Section 286 set out how the worldwide debt cap chapter applied to corporate groups and defined the 'total disallowed amount.' This represented the aggregate financing costs that a group's UK members could not deduct because they exceeded the group's worldwide external borrowing costs under United Kingdom tax law.

When was section 286 of TIOPA 2010 repealed and by which legislation?

Section 286 was repealed by section 20 and Schedule 5 (paragraph 11) of the Finance (No. 2) Act 2017. The repeal took effect for periods of account of worldwide groups beginning on or after 1 April 2017. Transitional provisions may apply for accounting periods straddling that date.

What replaced the worldwide debt cap rules including section 286 of TIOPA 2010?

The worldwide debt cap rules were replaced by the corporate interest restriction regime, introduced by section 20 and Schedule 5 of the Finance (No. 2) Act 2017. This new regime imposes a different framework for limiting the amount of net interest expense that corporate groups can deduct for United Kingdom tax purposes.

Did the worldwide debt cap rules under section 286 apply to periods of account straddling 1 April 2017?

Yes. The old Part 7 worldwide debt cap rules, including section 286, continued to apply to periods of account that began before 1 April 2017, even if they ended after that date. Only periods of account beginning on or after 1 April 2017 fall under the new corporate interest restriction regime.

Taxation (International and Other Provisions) Act 2010 section 286

Application of Chapter and meaning of "total disallowed amount"

Section 286 set out how the chapter on worldwide debt caps applied and defined the concept of a "total disallowed amount" for groups of companies. This section has been repealed.

Section 286 was part of Part 7 of the Taxation (International and Other Provisions) Act 2010, which dealt with worldwide debt cap rules for corporate groups.
The entire Part 7, including this section, was repealed by the Finance (No. 2) Act 2017.
The repeal took effect for periods of account of worldwide groups beginning on or after 1 April 2017.
The worldwide debt cap rules were replaced by the corporate interest restriction regime introduced by section 20 and Schedule 5 of the Finance (No. 2) Act 2017.

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