Taxation (International and Other Provisions) Act 2010 section 439

Exemption in respect of certain pre-13 May 2016 loan relationships

Section 439 defines when a loan relationship entered into on or before 12 May 2016 qualifies as a "qualifying old loan relationship" for the purposes of the public infrastructure exemption from the corporate interest restriction rules, and sets out the conditions and limitations that apply.

• A loan relationship is a qualifying old loan relationship if the qualifying infrastructure company entered into it on or before 12 May 2016 and, at that date, at least 80% of the company's future qualifying infrastructure receipts over the qualifying period were highly predictable by reference to qualifying public contracts.
• Qualifying infrastructure receipts include revenues from the company's own qualifying infrastructure activities and a just and reasonable share of revenues from infrastructure activities of companies in which it holds direct or indirect interests through shares or loans, but excluding reimbursement of expenses.
• Receipts are treated as highly predictable where both their amounts and the factors affecting their volume are fixed by a qualifying public contract or can otherwise be predicted with a high degree of certainty, disregarding any inflation-linked adjustments in the contract.
• If a qualifying old loan relationship is amended after 12 May 2016 to increase the amount lent or extend its term, the public infrastructure exemption under section 438 applies as though those amendments had not been made, and any necessary just and reasonable apportionments must be carried out.