Taxation (International and Other Provisions) Act 2010 section 401

Effect of group ratio (blended) election on group ratio percentage

Section 401 explains how a group ratio (blended) election changes the way the group ratio percentage is calculated, by blending the applicable percentages of each investor in the group weighted by their respective shares.

• When a group ratio (blended) election is in effect for a period of account, the normal method of calculating the group ratio percentage under section 399 is replaced by a blended calculation based on each investor's applicable percentage and their share in the group.
• Each investor's applicable percentage is the highest of three figures: 30%, the standard group ratio percentage calculated under section 399, or (for a related party investor that belongs to a different worldwide group throughout the period) the group ratio percentage of that investor's own worldwide group.
• The blended group ratio percentage is found by multiplying each investor's applicable percentage by their share in the group, then adding all the resulting amounts together.
• Where an investor's worldwide group has accounting periods that do not exactly match the relevant period of account, the investor's group ratio percentage is time-apportioned across the overlapping periods and then aggregated to produce a single figure for the relevant period.