Taxation (International and Other Provisions) Act 2010 section 385

The tax-interest income amounts of a company

Section 385 defines what counts as a "tax-interest income amount" for a company within a worldwide group, covering various types of interest-like income brought into account for corporation tax purposes.

• A tax-interest income amount is any amount brought into account for corporation tax in a relevant accounting period that falls into one of four categories: loan relationship credits, derivative contract credits, financing income from certain arrangements, or guarantee fee income.
• The financing income category covers income implicit in amounts receivable under finance leases, debt factoring or similar transactions, and service concession arrangements accounted for as financial assets.
• Guarantee fee income qualifies where a company receives income from another company in return for guaranteeing that other company's borrowings.
• Where a company's accounting period includes any "disregarded periods" — time falling outside the worldwide group's period of account or during which the company was not a group member — the tax-interest income amount must be reduced on a just and reasonable basis, potentially to nil.

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