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HMRC internal manual

Corporate Finance Manual

Debt cap: particular types of company: group treasury companies: periods of account beginning on or after 11 December 2012

Additional conditions

Changes to the conditions for a company to qualify as a group treasury company were added in FA13 for periods of account starting on or after 11 December 2012.

First, while a group treasury company election must still be made within three years of the end of the period of account of the worldwide group, the making of an election became a criterion for a company to be a group treasury company for the debt cap rules. See CFM92520.

Further, if, having made an election, all or substantially all of a company’s activities are treasury activities and all or substantially all of its assets and liabilities relate to such activities, the company’s financing expenses and financing income are included in the election. However, if a company cannot meet the ‘substantially all’ condition, the only financing expenses and financing income included in the election are those that relate to its treasury activities. TIOPA10/S316(6) provides that the extent to which amounts relate to a company’s treasury activities will be determined on a just and reasonable basis.