Taxation (International and Other Provisions) Act 2010 section 475

Meaning of "non-consolidated subsidiary" and "consolidated subsidiary"

Section 475 defines two key terms — "non-consolidated subsidiary" and "consolidated subsidiary" — used throughout the corporate interest restriction provisions of the Act.

• A non-consolidated subsidiary is one where the parent would measure its investment using fair value accounting rather than consolidating it line by line into group accounts.
• A consolidated subsidiary is any subsidiary that is not a non-consolidated subsidiary — in other words, one whose results would be fully consolidated into the parent's group accounts.
• The term "subsidiary" takes its meaning from international accounting standards (such as IFRS 10), which generally look at whether the parent has control over the entity.
• For the purposes of this section, all entities are assumed to be subject to international accounting standards, regardless of the framework they actually use.