Taxation (International and Other Provisions) Act 2010 section 375

Disallowance of deductions: full interest restriction return submitted

Section 375 explains how interest expense deductions are disallowed for companies within a worldwide group when a full interest restriction return has been submitted showing that the group is subject to interest restrictions.

• When a full interest restriction return is submitted for a worldwide group and it states the group is subject to interest restrictions, companies named in the return must disallow the amount of tax-interest expense allocated to them.
• A company that did not consent to the return (a "non-consenting company") may elect for the standard allocation not to apply to a particular accounting period, or may revoke such an election.
• If a non-consenting company makes such an election, it must instead disallow a pro-rata share of the group's total disallowed amount for that accounting period, calculated under Schedule 7A paragraph 24.
• Section 377 provides rules for identifying which specific tax-interest expense amounts must be left out of account as a result of these disallowance provisions.