Corporate interest restriction ― carry-forward amounts

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

What can be carried forward under the CIR rules?

Companies may experience variations in business profits and market interest rates. Changes in capital structure that impact the level of debt on the balance sheet may also occur from time to time. These and other sources of volatility could result in interest disallowances in some periods and unused interest allowances in other periods.

To provide a greater element of fairness in the corporate interest restriction (CIR) rules, there are a number of carry-forward provisions:

Tax attribute	Ownership	Carry-forward period	Statutory reference
Tax-interest disallowed	Company	Indefinite carry forward	TIOPA 2010, s 378
Unused interest allowance	Worldwide group	Five years	TIOPA 2010, ss 392–395A
Excess debt cap	Worldwide group	Next period of account (PoA)	TIOPA 2010, ss 400(3)–(7), 400A

As detailed in the table above, the tax attributes can belong to either the group as a whole or to an individual company. This distinction in ownership of these attributes is important.

Where the tax attribute belongs to the worldwide

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Corporate interest restriction ― carry-forward amounts

Corporate interest restriction ― carry-forward amounts