CFM92405 - Debt cap: the available amount: introduction

This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.

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 passes through the ‘gateway’ 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’ (see CFM91010+)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).