Citation, commencement and effect

1. —(1) These Regulations may be cited as the Corporate Interest Restriction (Consequential Amendments) Regulations 2017 and come into force on 29th December 2017.

(2) The Regulations have effect for accounting periods beginning on or after 1 April 2017.

(3) An accounting period beginning before and ending after 1 April 2017 is to be treated for the purposes of these Regulations as if so much of the accounting period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.

(4) Where it is necessary to apportion an amount to the two separate accounting periods, it is to be apportioned on a just and reasonable basis.

Amendments to the Authorised Investment Funds (Tax) Regulations 2006

2. —(1)The Authorised Investment Funds (Tax) Regulations 2006( 5 ) are amended as follows.

(2) In regulation 18 (interest distributions: general), after paragraph (2) insert—

“ (2A) For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, an interest distribution is treated as not being a tax-interest expense amount ( 6 ) of the authorised investment fund. ”

(3) In regulation 69Z16 (PAIF distributions (interest))( 7 ), after paragraph (2) insert—

“ (2A) For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, a PAIF distribution (interest) is treated as not being a tax-interest expense amount of the company. ”

(4) In regulation 69Z61 (TEF distributions (non-dividend))( 8 ), after paragraph (2) insert—

“ (2A) For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, a TEF distribution (non-dividend) is treated as not being a tax-interest expense amount of the Tax Elected Fund. ”

Amendment to the Taxation of Securitisation Companies Regulations 2006

3. —(1)The Taxation of Securitisation Companies Regulations 2006( 9 ) are amended as follows.

(2) At the end insert—

“ 22. —(1) For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010—

(a) the net tax-interest income ( 10 ) for an accounting period of the securitisation company is the sum of—

(i) the amount of profit calculated under regulation 14 for that period, and

(ii) the amount of any management fee paid in that period by the securitisation company to another UK group company ( 11 ) in relation to the management of assets held by the securitisation company for the purposes of the capital market arrangement; and

(b) the adjusted corporation tax earnings ( 12 ) of the securitisation company for an accounting period is a negative amount equal to the amount in paragraph (a)(ii).

(2)Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of that Act ( 13 ) does not apply in relation to any interest paid or other distribution made by a securitisation company. ”

Amendment to the Taxation of Insurance Securitisation Companies Regulations 2007

4. —(1)The Taxation of Insurance Securitisation Companies Regulations 2007( 14 ) are amended as follows.

(2) At the end insert—

“ The Taxation (International and Other Provisions) Act 2010

12. Section 414(3)(b) (qualifying net group-interest expense, results dependent securities) of TIOPA 2010 does not apply in relation to any interest paid or other distribution made by an insurance securitisation company. ”

Amendment of the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009

5. —(1) Amend the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009( 15 ) as follows.

(2) In Part 2, after regulation 12 insert—

“ Application of corporate interest restriction rules

12A. For the purposes of Part 10 (Corporate Interest Restriction) of TIOPA 2010, an interest distribution is treated as not being a tax-interest expense amount of the company. ”