Commentary

D1.1442 Modification of the corporate interest restriction for qualifying infrastructure companies

Corporate tax
Corporate tax | Commentary

D1.1442 Modification of the corporate interest restriction for qualifying infrastructure companies

Corporate tax | Commentary

Corporate interest restriction—modification of CIR legislation for qualifying infrastructure companies

D1.1442 Modification of the corporate interest restriction for qualifying infrastructure companies

This section of commentary considers the way in which the corporate interest restriction (CIR) legislation is modified for a qualifying infrastructure company so that the public benefit infrastructure exemption may apply.

A company is required to make an election for the modified treatment to apply for an accounting period and such election must normally be made before the end of the first accounting period for which it is to have effect1. (In the case of accounting periods beginning before 1 April 2018 an election will have effect where it is made before 1 April 20182). This exception was required as the legislation originally required that an election had to be made before the start of the first period of account for which it was to have effect. The deadline for making the election was amended with retrospective effect.) Once made, an election cannot be revoked for 5 years. Where the modified treatment applies:

  1.  

    •     interest and other amounts payable to unrelated third parties are not treated as tax-interest expense amounts provided the recourse of the creditor is limited to income or assets of a qualifying infrastructure company, or shares in or debt issued by a qualifying infrastructure company

  2.  

    •     interest and other expenses on certain loan relationships to which a qualifying infrastructure company was a party before 12 May 2016 are not treated as tax-interest expense amounts of the

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