Taxation (International and Other Provisions) Act 2010 section 411

"Relevant expense amount" and "relevant income amount"

Section 411 defines the types of financing costs ("relevant expense amounts") and financing income ("relevant income amounts") that are used in the corporate interest restriction rules.

• Relevant expense amounts cover a wide range of financing costs including loan interest, finance lease charges, debt factoring charges, derivative contract losses, alternative finance returns, and amounts treated as interest under anti-avoidance rules — but exclude exchange losses, impairment losses, and pension scheme amounts.
• Relevant income amounts are the mirror image, covering financing income such as loan interest receivable, finance lease income, derivative contract gains, and equivalent receipts — again excluding exchange gains, reversals of impairment losses, and pension scheme amounts.
• Losses or gains on derivative contracts linked to ordinary trading risks (not financial trading risks) are excluded, provided the derivative was entered into wholly for reasons unrelated to the capital structure of the worldwide group or any of its members.
• The definitions also capture amounts that would fall into these categories if the company in question were within the charge to UK corporation tax, ensuring the rules apply consistently across a worldwide group.

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