Taxation (International and Other Provisions) Act 2010 section 374

Interest restriction returns

Section 374 introduces Schedule 7A of TIOPA 2010, which sets out the administrative framework for interest restriction returns, including how they are prepared and submitted, how enquiries are conducted, and what information powers apply.

• Schedule 7A requires a reporting company to be appointed for each worldwide group to prepare and submit interest restriction returns for each period of account, though individual companies can elect to be "non-consenting companies" unaffected by the reporting company's allocation of interest restrictions.
• The interest restriction return is the vehicle through which key elections are made (such as the group ratio election), and through which the reporting company allocates interest restrictions and interest reactivations among group members — with non-consenting companies receiving a pro-rata share of any restriction.
• The Schedule imposes record-keeping and preservation obligations on group members and gives HMRC powers to enquire into interest restriction returns and to make determinations where filing or other obligations are breached.
• Information powers are granted both to group members (to obtain data from fellow members) and to HMRC officers, and the Schedule also covers how company tax returns are amended to reflect the outcomes of the corporate interest restriction rules.