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HMRC internal manual

Corporate Finance Manual

Interest restriction: groups, periods and financial statements: the worldwide group: Overview

TIOPA10/S473, S492

Corporate Interest Restriction operates by looking at the overall position of the worldwide group rather than at companies in isolation. The fixed ratio method, for example, is based on the aggregated amount of tax-EBITDA across the group. It is therefore vital to establish which companies comprise the group.

The worldwide group consists of:

  • an ultimate parent, and
  • its consolidated subsidiaries (if any).

Single-company worldwide group

In the case of an ultimate parent with no consolidated subsidies, the ‘worldwide group’ will simply consist of the ultimate parent company. This is referred to as a ‘single-company worldwide group’.

Multi-company worldwide group

In most cases the ultimate parent will have at least one consolidated subsidiary. Where a worldwide group has more than one member this is referred to as a ‘multi-company worldwide group’.

International Accounting Standards

A worldwide group is determined by reference to international accounting standards.

UK group company

At any point in time, a UK group company (S492) is a member of the worldwide group that is within the charge to Corporation Tax. In some contexts, reference is made to a relevant company, which is a UK group company that is a member of worldwide group for at least part of the period of account in question.

Information not available

Exceptionally, a UK group or sub-group may be unable to obtain information required to determine the scope of the worldwide group. CCMs and other HMRC staff should be prepared to discuss a pragmatic solution with any UK group or sub-group that genuinely finds itself in such a situation.

If appropriate, HMRC may use their powers to require another group member to provide the necessary information (TIOPA10/SCH7A/PARA62).