Taxation (International and Other Provisions) Act 2010 section 322

Stranded deficits in non-trading loan relationships: financing expense

Section 322 dealt with how stranded deficits arising from non-trading loan relationships were treated as financing expenses under the worldwide debt cap rules, but has been repealed and replaced by the corporate interest restriction regime.

• Section 322 was part of Part 7 of TIOPA 2010, which contained the worldwide debt cap provisions governing the amount of financing expense that UK groups could deduct for tax purposes.
• A stranded deficit in a non-trading loan relationship arose where a company had excess non-trading debits from its loan relationships that could not be relieved in the normal way, and this section specified how such deficits were characterised as financing expenses.
• The entire Part 7, including section 322, was repealed by Finance (No. 2) Act 2017, section 20 and Schedule 5, paragraph 11, which introduced the new corporate interest restriction rules.
• The repeal takes effect for periods of account of worldwide groups beginning on or after 1 April 2017, meaning the old worldwide debt cap rules may still be relevant for earlier periods.