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HMRC internal manual

Corporate Finance Manual

Debt cap: the available amount: introduction

How the available amount is used to calculate the total disallowed amount

TIOPA10/PT7/CH9 provides the definition of the ‘available amount’ for the purposes of Part 7.

Where a worldwide group fails the ‘gateway’ test for the purposes of TIOPA10/PT7 (see CFM90600), the main debt cap legislation will apply and it will be necessary for the worldwide group to calculate whether or not there should be a disallowance of deductions under the provisions of Chapter 3 of Part 7.

TIOPA10/S274 applies the provisions of Chapter 3 to groups where the ‘tested expense amount’ exceeds the ‘available amount’. The excess is termed ‘the total disallowed amount’ and represents the amount by which the overall net financing deductions of the group in the UK exceeds the gross consolidated financial expenses of the worldwide group as a whole.

This chapter is concerned with how the available amount is calculated, including.

  • what amounts are included within the available amount (CFM92415); and
  • what amounts are excluded from the available amount (CFM92450).