Taxation (International and Other Provisions) Act 2010 section 444

Joint venture companies

Section 444 modifies the corporate interest restriction rules for qualifying infrastructure companies that are structured as joint ventures, where some investors are qualifying infrastructure companies and others are not.

• Where a qualifying infrastructure company is owned jointly by qualifying infrastructure investors and non-qualifying investors, and each investor has lent money in proportion to their shareholding, the company can elect for special treatment under this section.
• The qualifying investors are effectively removed from the group ratio and associated worldwide group calculations, and their shares are redistributed proportionally among the non-qualifying investors for the purposes of those calculations.
• The third-party interest exemption available under the public infrastructure rules is scaled back so that only the proportion attributable to the qualifying investors qualifies as exempt, rather than the full amount.
• The joint venture company's tax-EBITDA and other amounts brought into the corporate interest restriction calculations are reduced to reflect only the non-qualifying investors' proportion, ensuring that the infrastructure exemptions apply only to the qualifying investors' share.