Section 414 | Qualifying net group-interest expense ^F1

(1)For the purposes of this Part the “qualifying net group-interest expense” of a worldwide group for a period of account of the group is (subject to subsection (2))—^F1

(2)Where the amount determined under subsection (1) is negative, “the qualifying net group-interest expense” of the group for the period is nil.^F1

(3)In this section “downward adjustment” means a relevant expense amount that meets the condition in subsection (4), so far as it relates to—^F1

(a)a transaction with, or a financial liability owed to, a person who, at any time during the period, is a related party of a member of the group,^F1

(b)results-dependent securities, or^F1

(c)relevant equity notes.^F1F2

(4)The condition mentioned in subsection (3) is that the amount—^F1

(a)is recognised in the financial statements of the group for the period, as an item of profit and loss, and is not (and is not comprised in) a downward adjustment for the purposes of section 413 (adjusted net group-interest expense), or^F1

(b)is (or is comprised in) an upward adjustment for the purposes of that section.^F1

(5)In a case where—^F1

(a)the person mentioned in subsection (3)(a) is not a related party of a member of the group during any part of the period of account, or^F1

(b)during any part of the period of account, the financial liability mentioned in subsection (3)(a) is owed to a person who is not a related party of a member of the group,^F1

the amount of the downward adjustment under subsection (3)(a) is to be reduced by such amount (if any) as is attributable, on a just and reasonable basis, to that part.