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HMRC internal manual

Corporate Finance Manual

From
HM Revenue & Customs
Updated
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Debt cap: calculating the exemption of financing income amounts: de minimis amount

How small is small?

Once the financing expense amount and financing income amount are calculated and the expenses deducted from the income (see CFM91220) we need to consider if the difference is within the de minimis limit in TIOPA10/S331.

The difference is small and within the de minimis limit if it is less than £500,000.

If the net financing income is small, then TIOPA10/S330 (5) says that it is to be taken as nil. So a company with a small difference has nil net financing income.

Thus there are two circumstances when the net financing income is assumed to be nil:

* when the financing income amounts less the financing expense amounts is negative; or
* when the financing income amounts less the financing expense amounts is less than the de minimis limit.

For periods of account ending on or after 17 July 2012, groups can opt out of the de minimis amount by making an election under section 331ZA TIOPA - see CFM91245.