The definition of a group in the world wide debt cap (WWDC) rules has been changed with effect from 5 December 2013. The changes will ensure that the WWDC group isn’t broken where it includes companies limited by guarantee or other entities without ordinary share capital in the WWDC group.
The regulation-making powers will also be changed to allow HMRC to change the conditions to be met by companies electing to transfer WWDC liabilities to another group company.
Who will be affected?
Groups to which the world wide debt cap applies which include an entity which breaks the group.
5 December 2013.
These are technical changes that allow the WWDC rules to operate in the way that was originally intended. In certain circumstances, specific anti-avoidance provisions already prevent groups from deliberately limiting the effect of the WWDC rules by breaking the group using a company limited by guarantee or other entity without ordinary share capital. The new rules prevent the group being broken even where there is no tax avoidance motive.