Taxation (International and Other Provisions) Act 2010 section 348

Non-existent financial statements of the worldwide group

Section 348 explains how to determine the worldwide group's financial statements when the ultimate parent of the group does not actually prepare consolidated financial statements, but would be required to do so under international accounting standards (IAS) if it were a UK-listed company.

• Where the ultimate parent of a worldwide group does not prepare consolidated financial statements, the group must determine what those statements would look like if IAS had required them to be produced.
• The hypothetical financial statements are those that the ultimate parent would have been required to prepare under IAS, assuming it were a company with securities admitted to trading on a UK regulated market.
• These notional statements are referred to as the "deemed IAS financial statements" of the worldwide group and serve as the basis for applying the corporate interest restriction rules.
• This provision ensures that a worldwide group cannot avoid the interest restriction rules simply because its parent company does not, in practice, produce group consolidated accounts.

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