SCHEDULES

SCHEDULE 5U.K.Financing costs and income of group companies

Amendments of Chapter 3 (disallowance of deductions)U.K.

13U.K.After section 275 (meaning of “company to which this Chapter applies”) insert—

“275AMeaning of “dual resident investing company”

For the purposes of this Chapter, a company is a “dual resident investing company” in relation to the relevant period of account if that period, or any part of it, is a period in respect of which the company is prevented, because of section 109(2) of CTA 2010 (restriction on losses etc surrenderable by dual resident), from surrendering losses under Chapter 2 of Part 5 of that Act (group relief).”

14U.K.After section 280 (statement of allocated disallowances: requirements), insert—

“280AStatement of allocated disallowances: dual resident investing companies

(1)This section applies in relation to a statement of allocated disallowances submitted under section 278 or 279 that (pursuant to section 280(4)) lists, and specifies an amount or amounts in relation to, a dual resident investing company.

(2)The statement does not comply with section 280(4) unless—

(a)the companies listed pursuant to paragraph (a) of that provision include each company to which this Chapter applies that—

(i)is not a dual resident investing company, and

(ii)has one or more financing expense amounts for the relevant period of account, and

(b)the financing expense amounts specified pursuant to paragraph (b) of that provision include, in relation to each such company, each such financing expense amount.”

15(1)Section 284 (failure of reporting body to submit statement of allocated disallowances) is amended as follows.U.K.

(2)In subsection (2), for “Each company to which this Chapter applies that has a net financing deduction for the relevant period of account that is greater than nil” substitute “ Where a company to which this Chapter applies (“company A”)has a net financing deduction for the relevant period of account that is greater than nil, it ”.

(3)After subsection (2) insert—

“(2A)The total of the reductions required to be made by company A because of subsection (2) is—

(a)where company A or any other company to which this Chapter applies is a dual resident investing company, the amount determined in accordance with section 284A, and

(b)otherwise, the amount determined in accordance with subsection (3).”

(4)In subsection (3)—

(a)for “total of the reductions required to be made by a company because of subsection (2)” substitute “ amount referred to in subsection (2A)(b) ”, and

(b)in the definition of NFD, for “the company” substitute “ company A ”.

16U.K.After section 284 insert—

“284ASection 284: supplementary

(1)This section contains provision for determining the total of the reductions required to be made by company A because of section 284(2) in a case in which company A, or any other company to which this Chapter applies, is a dual resident investing company.

(2)If company A is not a dual resident investing company, the total of the reductions required to be made by company A is—

or, if lower, NFD.

(3)If company A is a dual resident investing company, the total of the reductions required to be made by company A is—

or, if that amount is negative or zero, nil.

(4)In subsections (2) and (3)—

• NFD, TEA and TDA have the same meaning as in section 284(3), and

• X is the total of the net financing deductions of all the companies to which this Chapter applies that are dual resident investing companies.”