Taxation (International and Other Provisions) Act 2010 section 430

Interest allowance (consolidated partnerships) election

Section 430 allows a worldwide group to elect that certain partnerships which are fully consolidated in the group accounts are instead treated as if they were accounted for using the equity method, for the purposes of the corporate interest restriction rules.

• Where an interest allowance (consolidated partnerships) election is in force for a period of account, the group's financial statements are treated as adjusted so that specified partnerships are no longer fully consolidated but are instead accounted for using the equity method.
• A "consolidated partnership" is a partnership whose results are consolidated with those of the ultimate parent as a single economic entity in the group accounts, and which does not at any time during the period have a subsidiary that is a company.
• The effect of the election is that no income or expense items of the specified partnership appear as line items of profit or loss in the group's financial statements for the purposes of the interest restriction calculations.
• The election must specify which consolidated partnerships it covers, and a partnership may only qualify if it meets both the full consolidation condition and the no-company-subsidiary condition throughout the period.

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