Taxation (International and Other Provisions) Act 2010 section 395

Amount of interest allowance for a period of account that is "unexpired" in later period

Section 395 determines how much of a group's unused interest allowance from an earlier period remains valid (or "unexpired") for use in a later period, applying a five-year carry-forward time limit.

• Unused interest allowance from an earlier period (the "originating period") can be carried forward and used in a later period (the "receiving period"), but only within a five-year window measured from the start and end of the originating period.
• If the receiving period falls entirely within five years of both the start and end of the originating period, all of the allowance is unexpired; if it begins five years or more after the originating period ends, none of the allowance is unexpired.
• Where the receiving period only partially overlaps the five-year window, the unexpired amount is calculated using formulae that time-apportion either the unused allowance from the originating period or the excess interest expense from the receiving period, depending on which end of the window is breached.
• If the receiving period both starts more than five years after the originating period starts and ends more than five years after the originating period ends (but still overlaps the window), the unexpired amount is the lower of the two formula results.