CFM91860 - Debt cap: failure to make statements of allocation: default allocation of disallowance for company with multiple financing expense amounts: example
This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.
Company T and the default disallowance
In the example in CFM91820 Company T has a default reduction of £393,023. Its net financing deduction of £1,300,000 is made up of the following financing expense amounts (it has no financing income amounts):
- Debt factoring costs £97,658
- Non-trade loan relationship debits £213,267 (excluding exchange losses and any other debits excluded by TIOPA10/PT7/S313(3))
- Trade loan relationship debits £85,984
- Finance lease financing costs £903,091
If Company T does not make an election specifying any other allocation then the default allocation will be as in the table below:
| Non trade loan relationship debits | £213,267 |
|---|---|
| Trade loan relationship debits | £85,984 |
| Finance lease financing costs | £93,772 |
| Debt factoring costs | £nil |
| Total | £393,023 |