CFM98590 - Interest restriction: administration: reporting requirements: calculating pro-rata allocations per company

TIOPA10/SCH7A/PARA23

Computing pro-rata amounts may involve two steps. The first is a computation of the pro-rata amount for a non-consenting UK group company for a period of account. Then, if the company바카라 사이트™s accounting periods do not coincide with the worldwide group바카라 사이트™s period of account, it is necessary to allocate the amount between accounting periods of the non-consenting company.

The computation of a non-consenting company바카라 사이트™s pro-rata share for a period of account is determined by a formula in TIOPA10/SCH7A/PARA23. The formula is A x B/C, where:

  • Amount A is the total disallowed amount for the worldwide group (TIOPA10/S373(2))
  • Amount B is the net tax-interest expense of the company for the period of account (S372(4)(b))
  • Amount C is the sum of the net tax-interest expense amounts for the period of account for all companies that have net tax-interest expense.

A company with net tax-interest income is treated as having net tax interest of zero and its net tax-interest income is not taken into account in the computation, therefore if a company does not have net tax-interest expense, its pro-rata allocation is zero.