Section 382 | The tax-interest expense amounts of a company ^F1

(1)References in this Part to a “tax-interest expense amount” of a company for a period of account of a worldwide group are to any amount that—^F1

(a)is (or apart from this Part would be) brought into account for the purposes of corporation tax in a relevant accounting period of the company, and^F1

(b)meets condition A, B or C.^F1

(1A)But, in the case of a company which is a charity (as defined in paragraph 1 of Schedule 6 to FA 2010) at the end of the period of account, references in this Part to a “tax-interest expense amount” of the company do not include references to an amount which meets Condition A, B or C.^F1F2

(2)Condition A is that the amount is a relevant loan relationship debit (see section 383).^F1

(3)Condition B is that the amount is a relevant derivative contract debit (see section 384).^F1

(4)Condition C is that the amount is in respect of the financing cost implicit in amounts payable under a relevant arrangement or transaction.^F1

(5)In subsection (4) “relevant arrangement or transaction” means—^F1

(a)a finance lease,^F1

(b)debt factoring, or any similar transaction, or^F1

(c)a service concession arrangement if and to the extent that the arrangement is accounted for as a financial liability.^F1

(6)Subsection (8) applies if an accounting period in which a tax-interest expense amount is (or apart from this Part would be) brought into account for the purposes of corporation tax contains one or more disregarded periods.^F1

(7)A “disregarded period” is any period falling within the accounting period—^F1

(a)which does not fall within the period of account of the worldwide group, or^F1

(b)throughout which the company is not a member of the group.^F1

(8)Where this subsection applies, the tax-interest expense amount mentioned in subsection (6) is reduced by such amount as is referable, on a just and reasonable basis, to the disregarded period or periods mentioned in that subsection.^F1

(9)An amount may be reduced to nil under subsection (8).^F1

(10)If—^F1

(a)an amount would have met condition A, B or C but for the application of a rule preventing its deduction,^F1

(b)some or all of it is deductible at a subsequent time as a result of the application of another rule, and^F1

(c)none of conditions A to C are met at that time,^F1

so much of the amount as is subsequently deductible is treated, at that time, as meeting whichever of condition A, B or C would have been met but for the application of the rule mentioned in paragraph (a).

(11)An example of a case to which subsection (10) applies is a case where—^F1

(a)an amount is prevented from being deducted as a result of any provision made by Part 6A (hybrid and other mismatches), and^F1

(b)another provision of that Part subsequently applies so as to permit some or all of it to be deducted from total profits.^F1