Taxation (International and Other Provisions) Act 2010 section 443

Interest capacity for group with qualifying infrastructure company etc.

Section 443 modifies how a worldwide group's interest capacity is calculated when the group includes a qualifying infrastructure company, generally by removing the benefit of the de minimis allowance, but with a safeguard that prevents the group from being worse off than it would have been under ordinary rules.

• Where a worldwide group includes a qualifying infrastructure company at any time in the period, its interest capacity is normally calculated without the benefit of the de minimis allowance (currently £2 million).
• An exception exists if no qualifying infrastructure company in the group receives tax-interest income from a related party qualifying infrastructure company outside the group (ignoring insignificant amounts).
• Under this exception, a comparison is made between the total disallowed amount calculated under the infrastructure rules (without de minimis) and the total disallowed amount calculated under ordinary rules (with only the de minimis allowance).
• If the infrastructure rules would produce a higher total disallowed amount than the ordinary rules, the group can instead use the de minimis amount as its interest capacity, and the rest of the infrastructure company provisions are switched off for that period.