Taxation (International and Other Provisions) Act 2010 section 477

Treatment of stapled entities

Section 477 explains how stapled entities are treated for the purposes of the corporate interest restriction rules, by deeming them to be subsidiaries of a single notional parent entity.

• Where two or more entities would each normally be the ultimate parent of their own worldwide group, but are stapled together, special rules apply.
• The stapled entities are treated as if they were consolidated subsidiaries of a single fictitious parent entity (the "deemed parent"), which is itself treated as the ultimate parent of a worldwide group.
• Entities are considered "stapled" to each other when, because of the nature of the rights attached to shares or interests in one entity, it is necessary or advantageous for a person holding, selling or buying interests in one entity to also hold, sell or buy interests in the other.
• The effect is to bring all the stapled entities and their subsidiaries within a single worldwide group for the purposes of the corporate interest restriction rules.