CFM97260 - Interest restriction: public infrastructure: joint elections modifying the effect of an election to be qualifying infrastructure company

TIOPA10/S435

Two or more qualifying infrastructure companies, who are members of the same worldwide group and have each made a S433 election, may make a joint election so to apply the infrastructure rules to them collectively.

In particular, a joint infrastructure election:

  • modifies the method of determining whether anything is ‘insignificant’ for the purposes of the public infrastructure income test and public infrastructure asset test;
  • means that where one of the members of a group election fails a condition necessary to be a qualifying infrastructure company, all members of the group election are deemed to fail that condition; and
  • may modify the time period which applies before a company can revoke its election to be a QIC (the anti-cycling provisions).

Such an election has no effect other than described above.

A joint infrastructure election has effect from a date specified in that election, which may not be before the first day of the “earliest elected accounting period”.

The deadline for making a S435 election is the end of the “earliest elected accounting period” in relation to which it is to have effect.

The “earliest elected accounting period” is the accounting period which is the first elected accounting period of an elected company and begins no later than the first elected accounting period of each elected company.

Where companies within the same CIR group do not have the same accounting periods, the earliest elected accounting period is the relevant period that ends no later than each other relevant period.

Example

A, B and C are all members of a worldwide group for CIR purposes. Their accounting periods for which they have made S433 elections are:

  • A – 1/4/2023 to 31/3/2024
  • B – 1/7/2023 to 30/6/2024
  • C – 1/1/2024 to 31/12/2024

As A has the earliest elected accounting period, if the group wish a S435 election to apply for that period, the S433 elections and the S435 election must be made by 31/3/2024.

This time limit has effect for accounting periods beginning on or after 1/4/2023. For S435 elections relating to periods before that date the election had to be made before the date from which it was to have effect.

The election may:

  • Be revoked jointly by the members of the election, and this will have effect from a date specified in that revocation; or
  • Cease to have effect for one (or more) members of the election if they give notice to HMRC and to the other members of the joint election, and specify the date they intend their withdrawal to have effect.

The date specified in a revocation or notice cannot be before the date on which it is made or given.