What was the tested expense amount under section 329 of TIOPA 2010?

The tested expense amount under section 329 of TIOPA 2010 was the aggregate UK tax-deductible financing expenses of a multinational group. It was compared against the worldwide group's available amount under the worldwide debt cap rules to determine whether any disallowance of financing cost deductions was required for UK corporation tax purposes.

When was section 329 of TIOPA 2010 repealed and what replaced it?

Section 329 was repealed by Finance (No. 2) Act 2017 through section 20 and Schedule 5, paragraph 11. The repeal took effect for periods of account of worldwide groups beginning on or after 1 April 2017. It was replaced by the corporate interest restriction regime, which takes a different approach to limiting interest and financing cost deductions.

Do the worldwide debt cap rules under Part 7 of TIOPA 2010 still apply to any periods?

Yes, the worldwide debt cap rules including section 329 still apply to periods of account of worldwide groups that began before 1 April 2017. For any accounting periods straddling that date or beginning before it, the old rules remain relevant. Only periods beginning on or after 1 April 2017 fall under the new corporate interest restriction regime.

What was the purpose of the worldwide debt cap regime in Part 7 of TIOPA 2010?

The worldwide debt cap regime ensured that UK companies within a multinational group could not deduct more financing costs for UK tax purposes than the total net financing costs borne by the worldwide group as a whole. If the UK tested expense amount exceeded the worldwide available amount, the excess was disallowed across UK group members.

Taxation (International and Other Provisions) Act 2010 section 329

The tested expense amount

Section 329 defined the "tested expense amount" for the purposes of the worldwide debt cap rules in Part 7 of the Act, but this provision has been repealed and replaced by the corporate interest restriction regime.

Section 329 was part of the worldwide debt cap provisions in Part 7 of TIOPA 2010, which limited the amount of financing expense a UK group could deduct for tax purposes by reference to the group's worldwide financing costs.
The "tested expense amount" was a key figure used in comparing a UK group's financing expenses against the consolidated worldwide figure to determine whether any disallowance was required.
The entire Part 7, including section 329, was repealed by Finance (No. 2) Act 2017 and replaced by the corporate interest restriction rules introduced by section 20 and Schedule 5 of that Act.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 took effect for periods of account of worldwide groups beginning on or after 1 April 2017, meaning the worldwide debt cap rules may still be relevant for earlier periods.

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