Part 7 of the Taxation (International and Other Provisions) Act 2010 contains provisions relating to the tax treatment of financing costs and financing income. As part of that legislation there are provisions which set a ceiling (known as the ‘available amount’) on the total interest and other specified financing expenses for which Corporation Tax deductions are available to a group of companies.

HMRC have published new draft regulations the purpose of which is to allow a wider range of financing expenses to be taken into account in calculating the available amount and which will include in the categories of expense for the ‘available amount’ certain specific arrangements that are treated for the purposes of Corporation Tax as if they were loans.

More background on this can be found at http://www.hmrc.gov.uk/drafts/available-amount.htm. The draft regulations can be accessed at http://www.hmrc.gov.uk/drafts/draft-regs-available-amount.pdf