Section 416 | Group-EBITDA

From legislation.gov.uk

(1)For the purposes of this Part “the group-EBITDA” of a worldwide group for a period of account of the group (“the relevant period of account”) is—

Formula

PBT + I + DA

where—

PBT is the group's profit before tax (which may be a negative amount) (see subsection (2));

I is the net group-interest expense of the group for the period (which may be a negative amount) (see section 410);

DA is the group's depreciation and amortisation adjustment (which may be a negative amount) (see subsection (3)).

(2)For the purposes of this Chapter a worldwide group's “profit before tax” is—

(a)the sum of the amounts that are recognised in the financial statements of the group for the period, as items of profit or loss, in respect of income of any description other than tax income, less

(b)the sum of the amounts that are recognised in the financial statements of the group for the period, as items of profit or loss, in respect of expenses of any description other than tax expense.

In this subsection “tax income” and “tax expense” have the meaning they have for accounting purposes.

(2A)An amount is not to be taken into account in calculating a worldwide group's profit before tax for the purposes of subsection (2) if it is, or relates to, an R&D expenditure credit under Chapter 1A of Part 13 of CTA 2009.

(3)In this section the group's “depreciation and amortisation adjustment” means the sum of the following amounts (any of which may be negative)—

(a)the capital (expenditure) adjustment (see section 417);

(b)the capital (fair value movement) adjustment (see section 418);

(c)the capital (disposals) adjustment (see section 419).

(4)The following expressions have the same meaning in sections 417 to 419 as they have in this section—

“the relevant period of account”;

“the group's profit before tax”.

(5)For provision affecting amounts recognised in financial statements in respect of certain profits or losses arising from derivative contracts, see section 420.