HMRC Draft legislation: corporate interest restriction

31 January 2017

HMRC has published a revised version of draft Finance Bill legislation containing the rules to restrict the amount of interest expense that companies can deduct with effect from 1 April 2017. The core rules around the 30% fixed-ratio rule and the group-ratio rule were set out in the draft published on 5 December. Changes in the revised draft include: group EBITDA 'alternative calculation' election; public infrastructure exemption; addition of creative industries reliefs to the amounts disregarded from EBITDA; exclusion of certain restructuring arrangements from the anti-avoidance rule; and confirmation that aggregate net tax-interest income is added to the interest allowance for an accounting period. Comments on the revised draft are invited by 23 February 2017.

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