CFM91250 - Debt cap: calculating the exemption of financing income amounts: UK group companies with different accounting periods

What if the UK group company does not have the same period of account as the worldwide group?

If a UK group company does not have the same period of account as the worldwide group then the financing income of the relevant group company is adjusted. The adjustment is made by reducing the financing income amount by the proportion of the accounting period of the UK group company that falls outside the period of account of the worldwide group.

Example

The accounting period of Company F is the year ending 30 September 2014 and its financing income amount for the period is £660,000. The accounting period for its worldwide group is the year ended 31 December 2014. The proportion of Company F’s accounting period that falls outside the period of account of the worldwide group is 3 months (October - December 2013). So the financing income amount is reduced by 3/12 x £660,000 which is £165,000. Company F’s financing income from its accounts to the year ended 30 September 2014 for the period of account of the worldwide group is £495,000.

It is likely that the UK group company will have finance income from its subsequent accounting period ended 30 September 2015 (for October to December 2014) that falls to be brought in as financing income for the 2014 period of account of the worldwide group.

The financing income that is outside the period of account of the worldwide group (the £165,000 for October to December 2013) is attributed to the previous period of account of the worldwide group ended 31 December 2013.