The Government has published proposed amendments to the CIR rules, including extending the deadline for appointing a reporting company.
The Government has published draft legislation making certain amendments to the CIR rules for inclusion in Draft Finance Bill 2018/19. Changes that are wholly relieving will take affect retrospectively from 1 April 2017. Most other changes will take effect for periods of account of the worldwide group beginning on or after 1 January 2019.
Click here to access the draft legislation.
One of the proposed amendments is to extend the deadline for appointing a reporting company until 12 months after the end of the relevant period of account (as compared to six months under the existing legislation), thus aligning the deadline for doing so with the deadline that applies for filing the interest restriction return. We understand that this change will only apply to appointments made from Royal Assent. Where the original deadline for a group has passed and the group failed to appoint a reporting company before that deadline, HMRC can be asked to exercise their discretion to appoint a reporting company for the group.
HMRC will also be given a new power to publish a notice requiring specified additional information that is reasonably required for the purposes of the CIR rules to be included in an interest restriction return.
Several of the other proposed changes are intended to align amounts taken from the group accounts (principally, the group’s ‘adjusted net group-interest expense’ or ‘ANGIE’, which forms the basis for the debt cap under the fixed ratio method) with amounts taken from the tax computations, either on a mandatory or elective basis, for example:
Changes will also be made to improve the interaction of the CIR rules with the rules for real estate investment trusts (REITs) to ensure that the REIT interest cover ratio test does not give rise to double restriction of interest payable.
Certain other changes clarify the way that certain elective provisions operate, for example:
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