CFM91030 - Debt cap: calculating the disallowance of financing expense amounts: financing expense amounts of a relevant group company
This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.
Establishing the financing expense amounts
The net financing deduction is the sum of the relevant group company바카라 사이트™s financing expense amounts for the period less the sum of the company바카라 사이트™s financing income amounts for the period. So to work out the net financing deduction we need to know what the financing expense amounts are. This is a general introduction to financing expense amounts: TIOPA10/PT7/CH7 contains further rules that exclude certain amounts from being financing expense amounts. Guidance on the specific exclusions can be found at CFM92000+.
The financing expense amount of a company for a period of account of the worldwide group is any amount that meets one of the three conditions in TIOPA10/S313. An expense is a financing expense if, apart from the operation of Part 7 it would be:
- brought into account as a trading or non-trading loan relationship debit (but see below for exceptions)
- brought into account for the purposes of corporation tax as financing cost implicit in payments made under finance leases; or
- brought into account for the purposes of corporation tax as financing cost payable on debt factoring or a similar transaction.
A loan relationship debit is not a financing expense if it is in respect of:
- an impairment loss;
- an exchange loss; or
- a related transaction.
CFM91040 to CFM91070 gives further guidance and examples on determining finance expense amounts.
There are specific rules for calculating the financing expense and financing income of:
- Group Treasury companies
- Real Estate Investment trusts
- Oil companies; and
- Industrial and Provident societies.
Guidance on these rules is at CFM92500.
There is also guidance on intra-group short term finance at CFM92000.