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HMRC internal manual

Corporate Finance Manual

Interest restriction: administration: reporting requirements: statements of allocated interest reactivations

TIOPA10/SCH7A/PARA25

Where a group has been subject to interest restriction in the past, and in a later period of account the interest allowance for the group (TIOPA10/S396) exceeds the group’s aggregate net tax-interest expense (ANTIE) (S390), interest expense that has previously been disallowed may be reactivated.

In this situation, the reporting company will be required by TIOPA10/SCH7A/PARA25 to submit a statement of interest reactivations in which the amount that may be reactivated is allocated between UK group companies. According to S379(1), a company may benefit from a reactivation of interest in a period of account only where:

  • A full interest restriction return is submitted by a reporting company for that period of account;
  • The return contains a statement that the group is subject to interest reactivations in the return period; and
  • The return complies with the requirements of TIOPA10/SCH7A/PARA20(3) including, in particular, the inclusion of a statement of allocated interest reactivations.

Reactivated interest allocated to a company enables it to bring into account disallowed tax interest amounts from earlier periods. The rules governing how this is calculated and limited are set out at CFM98620.

There are no differences between the arrangements for consenting and non-consenting companies.

PARA20(5A) provides that HMRC may, by notice, specify further information that should be included in an interest restriction return. It follows that the specified information may relate to the statement of allocated interest reactivations.

Where information in a statement of allocated interest reactivations is based on estimated figures, it is necessary to sate this and identify the information concerned (CFM98540).