Taxation (International and Other Provisions) Act 2010 section 379

Reactivation of interest

Section 379 explains how tax-interest expense amounts that were previously disallowed can be "reactivated" — that is, brought back into account and allowed as deductions — in a later period of account.

• Reactivation can only occur where a full interest restriction return has been submitted for the relevant period and that return includes a statement of allocated interest reactivations.
• A company listed on the reactivation statement must bring back into account previously disallowed tax-interest expense amounts, up to the total of its allocated reactivation for that return period.
• The reactivated amounts are treated as if they were tax-interest expense amounts of the specified accounting period, preserving their original character (for example, a non-trading loan relationship debit remains a non-trading debit).
• The specified accounting period in which reactivation takes effect is generally the company's earliest relevant accounting period, or, if the company joined the worldwide group during the period of account, the earliest relevant accounting period in which it was a member of that group.