Taxation (International and Other Provisions) Act 2010 section 428

Section 427: associated worldwide groups

Section 428 defines what an "associated worldwide group" is and sets out the rules for how such groups are treated when calculating group interest and group EBITDA under the corporate interest restriction rules in section 427.

• An associated worldwide group is the worldwide group headed by a non-consolidated associate that has been specified in an interest allowance (non-consolidated investment) election.
• Even if the specified non-consolidated associate would not normally qualify as the ultimate parent of a worldwide group, it is treated as though it does, and if no group financial statements exist for the relevant period, IAS financial statements are assumed to have been prepared.
• Interest expense amounts recognised in the associated worldwide group's financial statements are excluded to the extent they relate to financial liabilities owed by the associated group's members to members of the principal worldwide group, and any profits or losses relating to periods when the non-consolidated associate is itself a member of the principal group are also disregarded.
• The associated worldwide group is treated as having made an interest allowance (alternative calculation) election only if the principal worldwide group has such an election in effect for the relevant period, and is treated as not having made any other elections under Part 10.