Section 394 | When interest allowance is “used” ^F1

(1)This section applies for the purposes of this Chapter.^F1

(2)The amount of the interest allowance of a worldwide group for a period of account of the group (“the originating period”) that is “used” in the originating period is the lower of—^F1

(a)the interest allowance for the originating period, and^F1

(b)the sum of—^F1

(i)the aggregate net tax-interest expense of the group for the originating period;^F1

(ii)the total amount of tax-interest expense amounts required to be brought into account in the originating period under section 379 (reactivation of interest) by members of the group.^F1

(3)The amount of the interest allowance for the originating period that is “used” in a later period of account of the group (“the receiving period”) is the lower of—^F1

(a)the interest allowance so far as it is available in the receiving period (see section 393), and^F1

(b)the relevant part of the aggregate net tax-interest expense of the group for the receiving period (see subsection (4)).^F1

(4)In subsection (3)(b) “the relevant part of the aggregate net tax-interest expense of the group for the receiving period” is (subject to subsection (5))—^F1

(5)Where the amount determined under subsection (4) is negative, “the relevant part of the aggregate net tax-interest expense of the group for the receiving period” is nil.^F1