Taxation (International and Other Provisions) Act 2010 section 376

Disallowance of deductions: no return, or non-compliant return, submitted

Section 376 sets out how tax deductions for interest expenses are disallowed where a group has either failed to appoint a reporting company, failed to submit an interest restriction return, or submitted a return that does not comply with the required standards.

• This section applies when a worldwide group is subject to interest restrictions, the relevant deadline has passed, and there is a failure relating to the reporting company appointment, the return itself, or the accuracy of the return
• The relevant deadline is either the filing date for the interest restriction return (if a reporting company has been appointed) or 12 months after the end of the period of account (if no reporting company has been appointed)
• Three trigger conditions exist: no reporting company has been appointed; a reporting company has been appointed but no return has been filed; or a return has been filed but it does not meet the required standards (for example, it contains inaccurate figures)
• Each company that was a member of the worldwide group during the period must disallow tax-interest expense deductions equal to its pro-rata share of the total disallowed amount allocated to its accounting periods