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UK: Corporate interest restriction proposal; identifying the ultimate parent company

UK: Corporate interest restriction proposal

The next article in our series looks at how to identify the ultimate parent and the worldwide group.


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This is the seventh of our series of articles looking at some of the detail of the new corporate interest restriction (CIR) rules, which have been removed from Finance Bill 2017 following the announcement of the general election. Based upon the HMRC messaging that “There has been no policy change and the government has announced it will legislate for the provisions at the earliest opportunity in the next Parliament” we would recommend that groups assume that the rules will apply from 1 April 2017 until an announcement is made by Ministers. The CIR rules operate by reference to the ‘worldwide group’.  In particular, as discussed in previous articles, the total disallowed amount is computed on a group-wide basis and is then allocated between UK group companies. It is, therefore, vital to establish the ultimate parent and which entities comprise the worldwide group.

Generally speaking, a worldwide group will consist of all entities that would form part of a group applying International Accounting Standards (IAS). Broadly, this is a parent and its consolidated subsidiaries, but subject to certain specific overrides.


Read a May 2017 report prepared by the KPMG member firm in the UK

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