CFM99200 | Administration: payments between group companies for allocated disallowed amounts

Where a reporting company is appointed and submits an interest restriction return (IRR), it is possible that a company within the CIR group is allocated an amount of CIR disallowance that is above that company’s pro-rata allocation, had such an allocation been made.

The group company that is allocated an amount of CIR disallowance may receive a payment from another group company which would have suffered the CIR disallowance had the pro-rata allocation been made. This is akin to a payment that a claimant company may make to a surrendering company in respect of group relief (see CTM80145).

Provided that the payment made by the paying group company in respect of the CIR disallowance taken on by another group company does not exceed the CIR disallowance that the paying group company would have suffered using the pro-rata allocation, the payment should not affect the profits or losses of either company for corporation tax purposes.