CFM95260 - Special rules

There are adaptations of the core Corporate Interest Restriction rules to deal with issues specific to particular types of business.

Public infrastructure

TIOPA10/PT10/CH8

Special rules are applied in relation to Public Infrastructure. The key effect of the elective rules is to exclude certain amounts of interest and similar expense paid to unrelated parties from tax-interest expense.

These rules only apply to companies that are fully taxed in the UK and whose assets and income are, ignoring insignificant amounts, entirely related to the provision of public infrastructure assets. To qualify an election must be made, which remains in effect for a minimum of five years.

There are certain consequential and additional effects of this treatment. In particular, the tax-EBITDA of a qualifying infrastructure company is treated as nil, and equivalent adjustments are made for the purpose of calculating the group ratio percentage.

There are special rules for joint venture companies, partnerships or other transparent entities within the public infrastructure rules.

Particular type of company or business

TIOPA10/PT10/CH9

Specific rules within chapter 9 ensure the Corporate Interest Restriction operates as intended for the following types of company or business:

• Banking companies
• Oil and Gas
• Real Estate Investment Trusts (REITS)
• Insurance Entities
• Members of Lloyds
• Shipping companies subject to tonnage tax
• Co-operative and community benefit societies
• Charities

Anti-avoidance provisions

TIOPA10/PT10/CH10

A regime anti-avoidance rule exists to counteract the effect of avoidance arrangements.