What did section 318 of TIOPA 2010 originally deal with?

Section 318 of TIOPA 2010 was part of the worldwide debt cap regime in Part 7 of the Act. It specifically addressed how the debt cap rules applied to companies carrying on oil extraction activities, which have their own particular tax treatment under United Kingdom law, limiting excessive debt loading into UK operations.

When was section 318 of TIOPA 2010 repealed and by which legislation?

Section 318 was repealed by section 20 and Schedule 5 (paragraph 11) of the Finance (No. 2) Act 2017.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. For periods straddling or beginning before that date, the old worldwide debt cap rules continued to apply.

What replaced the worldwide debt cap rules including section 318?

The corporate interest restriction regime, introduced by Finance (No. 2) Act 2017, replaced the worldwide debt cap rules. Under the new regime, a group's net UK interest deductions are generally capped at 30 per cent of UK taxable EBITDA, or at the group's actual net external interest cost if more favourable. Special provisions exist for oil extraction companies.

How does the corporate interest restriction apply to oil extraction companies in the UK?

Under the corporate interest restriction rules, oil extraction companies must determine interest expense deductibility using the new framework rather than the repealed worldwide debt cap. Special provisions exist within the new regime for oil extraction companies, and the rules apply to periods of account of worldwide groups beginning on or after 1 April 2017.

Taxation (International and Other Provisions) Act 2010 section 318

Companies engaged in oil extraction activities

Section 318, which previously dealt with how the worldwide debt cap rules applied to companies engaged in oil extraction activities, has been repealed and replaced by the corporate interest restriction regime.

Section 318 was part of Part 7 of TIOPA 2010, which contained the worldwide debt cap rules limiting the amount of tax-deductible financing costs for large groups.
The entire Part 7, including this section, was repealed by Finance (No. 2) Act 2017.
The repeal took effect for periods of account of worldwide groups beginning on or after 1 April 2017.
The replacement corporate interest restriction rules now govern the deductibility of corporate interest expense, including for companies involved in oil extraction.

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