Taxation (International and Other Provisions) Act 2010 section 436

Meaning of "qualifying infrastructure activity"

Section 436 defines what counts as a "qualifying infrastructure activity" for the purposes of the corporate interest restriction public infrastructure rules, covering both public infrastructure assets and certain rental property.

• A company carries on a qualifying infrastructure activity if it provides a public infrastructure asset or carries on activities ancillary to that provision — where "provision" includes acquisition, design, construction, conversion, improvement, operation or repair.
• A public infrastructure asset is a tangible asset forming part of UK infrastructure that passes a public benefit test (procured by a public body or used in a regulated activity), has an expected economic life of at least 10 years, and meets a group balance sheet test.
• Certain buildings or parts of buildings also qualify as public infrastructure assets if they are let on a short-term basis (effective lease duration of 50 years or less) within a UK property business to unrelated parties, have at least a 10-year expected life, and meet the group balance sheet test — but not if disposal profits would be taxed as trading income.
• The group balance sheet test requires the asset to be recognised on the balance sheet of the company or an associated company that is within the charge to UK corporation tax on all its income sources (with insignificant income sources of non-UK resident companies being disregarded).

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