Commentary

D1.1420 Overview of the corporate interest restriction fixed ratio method

Corporate tax
Corporate tax | Commentary

D1.1420 Overview of the corporate interest restriction fixed ratio method

Corporate tax | Commentary

Corporate interest restriction—fixed ratio method

D1.1420 Overview of the corporate interest restriction fixed ratio method

The fixed ratio method is the default method of limiting the deduction available under the corporate interest restriction (CIR) rules which apply from 1 April 2017. The fixed ratio method restricts the deductibility of interest based on a mathematical proportion of a measure of adjusted taxable income referred to as tax-EBITDA. Another method (the group ratio method, see D1.1425) is available by election only.

The fixed ratio method involves comparing two amounts. The lower of the two (provided it is above the de minimis amount)

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial