The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The group ratio method is an optional method of limiting the deduction available under the corporate interest restriction (CIR) rules. It is available by election. For a general overview of the regime, see the Corporate interest restriction ― overview guidance note, and for details of the default fixed ratio method, see the Corporate interest restriction ― fixed ratio method guidance note.
Where a group’s net tax-interest expense in a period of account would exceed the maximum interest capacity given by the fixed ratio method, a group may elect to calculate its basic interest allowance using the group ratio method instead. The group ratio method will generally only be beneficial to groups whose gearing worldwide is higher than the gearing of the companies subject to corporation tax in the UK.
As with the fixed ratio method, the group ratio method restricts the deductibility of interest based on the lower of two figures. These are:
a proportion (the group ratio percentage (GRP)) of the aggregate tax-EBITDA of the companies in the CIR worldwide group which are subject to UK corporation tax and
the group ratio debt cap, which is generally the qualifying net group interest expense (QNGIE)
Broadly, this method differs from the fixed ratio method in two ways.
The fixed ratio of 30% is replaced with the GRP, which is variable year on year. The GRP reflects the proportion that the net external interest expense of the worldwide group bears to the EBITDA of the worldwide group (based on the figures contained in the group’s consolidated accounts).
The group ratio debt cap is replaced by the fixed ratio debt cap. This is based on QNGIE which, unlike the adjusted net group interest expense (ANGIE) used for the fixed ratio debt cap, excludes interest on related party debt and certain equity-like securities from the calculation.
If the GRP is, or is likely to be, less than 30% and the debt cap will not be the limiting figure, then it
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
The substantial shareholding exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. Conversely, if losses are generated by the disposal and the SSE conditions are
IntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel. See the Travel expenses guidance note for more information of when
Summary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions over 50g/km but not more than 110g/km (to be reduced to 50g/km and below from April 2021)18%CAA
This guidance note provides details of quarterly instalment payments (QIPs) for corporation tax purposes and which companies need to pay their tax liabilities in this manner.Generally, corporation tax is payable nine months and one day after the end of the relevant accounting period. However, large
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.