London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

Interest in international groups of companies

The Finance Act introduced new rules on worldwide debt caps for accounting periods beginning on or after 1 January 2010. These apply where the UK debt:

  • is £3 million or more
  • exceeds 75% of the gross worldwide debt.

If you do fall within the provisions you are required, broadly, to calculate the proportion of total worldwide interest attributable to the UK as a proportion of UK:worldwide debt.

If the actual interest paid in the UK exceeds the calculated amount there is a disallowance.

Again this is complicated. It also means that calculating the current year’s tax, eg for the purposes of instalments, is virtually impossible unless you have total knowledge of overseas companies’ plans and activities.

Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author.

 

 

Date: 24th August, 2009
Author: Cathy Corns

SHARE THIS

Articles from this Author

Contact Business Service Partners

Choose from the drop down menu below to select a Partner to contact.

Tweet

Congratulations to @FairstoneNI and @mercerhole from @MoneyMgmtMag and @FTA_Advantage #MMFPAwards pic.twitter.com/QiGtQSnLoL

Good luck to Michael Lapham at the #MMFPAwards and everyone who has been shortlisted for an award #FinancialPlanning #Retirement

Follow

LinkedIn

For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole

Click here to follow us on LinkedIn