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
Articles from this Author
1st November, 2018
Budget 2018 - Changes for businesses
22nd October, 2018
Making the most out of your home? Rent a room relief
3rd May, 2018
Tax changes for non-resident corporate landlords
4th April, 2018
EMI options - a current risk
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
Season’s Greetings and Happy New Year from everyone at Mercer & Hole pic.twitter.com/x4o1o9tbWP
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole