What was the purpose of section 295 of TIOPA 2010?

Section 295 of TIOPA 2010 granted HM Revenue & Customs the power to make regulations prescribing the form and content of statements of allocated exemptions. These statements were required under the worldwide debt cap regime in Part 7, which limited tax-deductible financing costs for UK members of large multinational groups.

When was section 295 of TIOPA 2010 repealed and what replaced it?

Section 295 was repealed by Finance (No. 2) Act 2017, effective for periods of account of worldwide groups beginning on or after 1 April 2017. It was replaced by the corporate interest restriction rules introduced under section 20 and Schedule 5 of that Act, providing a more comprehensive framework for limiting corporate interest deductions.

Can the worldwide debt cap rules including section 295 still apply to any periods?

Yes. The repeal applies only to periods of account beginning on or after 1 April 2017. For earlier periods still open or under enquiry, the old worldwide debt cap rules in Part 7 of TIOPA 2010, including section 295, may still be relevant. Groups with accounting periods starting before that date remain subject to the former regime.

What were statements of allocated exemptions under the worldwide debt cap?

Under the worldwide debt cap regime, multinational groups were required to prepare statements allocating exemptions among their UK group companies. These statements determined how much tax-deductible financing cost each UK entity could claim. Section 295 empowered HMRC to regulate the form and content of these statements through secondary legislation.

Taxation (International and Other Provisions) Act 2010 section 295

Power to make regulations about statement of allocated exemptions

Section 295 granted HM Revenue & Customs the power to make regulations governing the form and content of statements of allocated exemptions under the former worldwide debt cap rules, but this section was repealed with effect for periods of account beginning on or after 1 April 2017.

Section 295 was part of Part 7 of TIOPA 2010, which contained the worldwide debt cap regime — a set of rules limiting the amount of tax-deductible financing costs for UK members of large multinational groups.
The section gave HMRC regulation-making powers to prescribe how statements of allocated exemptions should be prepared and presented.
The entire Part 7 worldwide debt cap regime, including this section, was repealed by Finance (No. 2) Act 2017 and replaced by the corporate interest restriction rules introduced by section 20 and Schedule 5 of that Act.
The repeal takes effect for periods of account of worldwide groups beginning on or after 1 April 2017, meaning the old rules may still be relevant for earlier periods.

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