Taxation (International and Other Provisions) Act 2010 section 410

Net group-interest expense

Section 410 explains how to calculate the net group-interest expense of a worldwide group for a period of account, including adjustments where interest costs or income have been capitalised into asset values.

• Net group-interest expense is calculated as total relevant expense amounts minus total relevant income amounts, as recognised in the group's consolidated financial statements as items of profit or loss.
• Where interest costs have been capitalised into the carrying value of a non-relevant asset and that value is later written down, the portion of the write-down attributable to the capitalised interest is added to the expense side of the calculation.
• Similarly, where interest income has been capitalised into the carrying value of a non-relevant asset and that value is later written down, the portion attributable to the capitalised income reduces the income side of the calculation.
• Where interest expense or income has been capitalised into a relevant asset, any write-down of that asset's carrying value is excluded from both sides of the net group-interest expense calculation.