What was the purpose of section 311 of the Taxation (International and Other Provisions) Act 2010?

Section 311 was an anti-avoidance provision designed to counter arrangements that sought to exploit or manipulate the worldwide debt cap rules in Chapter 5 of Part 7. It served as a backstop to prevent taxpayers from circumventing limits on tax-deductible financing costs through contrived schemes or arrangements.

When was section 311 of TIOPA 2010 repealed and what replaced it?

Section 311 was repealed by the Finance (No. 2) Act 2017. Section 20 and Schedule 5, paragraph 11 of that Act removed the entire Part 7 worldwide debt cap regime. It was replaced by the corporate interest restriction rules, effective for periods of account of worldwide groups beginning on or after 1 April 2017.

Does section 311 still apply to any periods of account?

Section 311 may still apply to periods of account of worldwide groups that began before 1 April 2017. For any period straddling that date or commencing earlier, the old worldwide debt cap rules including section 311 would still have applied. For periods beginning on or after 1 April 2017, the new corporate interest restriction rules apply instead.

What was the worldwide debt cap regime that section 311 formed part of?

The worldwide debt cap regime in Part 7 of TIOPA 2010 was broadly intended to limit the amount of tax-deductible financing costs that UK members of a worldwide group could claim, by reference to the group's overall external financing costs. Chapter 5 contained the detailed computational rules for determining how the cap applied to groups.

Taxation (International and Other Provisions) Act 2010 section 311

Schemes involving manipulation of rules in Chapter 5

Section 311 was an anti-avoidance provision targeting schemes that manipulated the worldwide debt cap rules in Chapter 5, but it has been repealed and replaced by the corporate interest restriction regime.

Section 311 was designed to counter arrangements that sought to exploit or manipulate the worldwide debt cap rules contained in Chapter 5 of Part 7 of the Act.
The entire Part 7 of the Act, which included section 311, was repealed by the Finance (No. 2) Act 2017.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 regime was replaced by the corporate interest restriction rules introduced by section 20 and Schedule 5 of the Finance (No. 2) Act 2017.

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