½Û×ÓÊÓÆµ

Corporate interest restriction ― fixed ratio method

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Corporate interest restriction ― fixed ratio method

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
imgtext

The fixed ratio method is the default method of limiting the deduction available under the corporate interest restriction (CIR) rules. For a general overview of the regime, see the Corporate interest restriction ― overview guidance note.

The fixed ratio method restricts the deductibility of interest based on the lower of two figures. These are:

  1. •

    a proportion (30%) of the aggregate tax-EBITDA of the companies in the CIR worldwide group which are subject to UK corporation tax, and

  2. •

    the fixed ratio debt cap, which is generally the adjusted net group interest expense (ANGIE)

An alternative method for calculating the restriction, known as the group ratio method, is available by election only. See the Corporate interest restriction ― group ratio method guidance note for details.

The fixed ratio method is so-called as it uses a fixed ratio (30%) of tax-EBITDA.

The fixed ratio debt cap looks at the external net group interest expense (sometimes referred to by the acronym NGIE) of the worldwide group based on the consolidated P&L. This is then

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by
  • 16 Apr 2024 10:01

Popular Articles

Class 4 national insurance contributions

Class 4 national insurance contributionsWhat is Class 4 NIC?Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2

14 Jul 2020 11:13 | Produced by Tolley Read more Read more

Foreign exchange issues

Foreign exchange issuesOverview of foreign exchange provisionsForeign exchange (FX) movements are generally taxed following the rules applicable to the underlying income, expenditure, asset or liability on which they arise, broadly as follows:Capital assetsOn a realisation basis (ie on disposal)

14 Jul 2020 11:44 | Produced by Tolley Read more Read more

Classes of NIC and who pays them

Classes of NIC and who pays themClass 1 NICClass 1 NIC is payable on earnings paid to an employed worker which derive from, or are treated as deriving from, an employed earner’s employment in the UK. There are two kinds of Class 1 NIC, primary contributions for which the employee is liable and

14 Jul 2020 11:13 | Produced by Tolley in association with Jim Yuill at The Yuill Consultancy Read more Read more