Section 414 | Qualifying net group-interest expense

(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))—

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

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

(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,

(b)results-dependent securities, or

(c)relevant equity notes.

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

(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

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

(5)In a case where—

(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

(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,

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.