The time has arrived when the practicalities of the much discussed interest limitation rule (ILR) should be considered and implemented by filers. It is important to note that regardless of whether there is an interest restriction, relevant disclosures are required to be made on the Form CT1 for accounting periods commencing on or after 1 January 2022.
Filers of the annual CT1 will have noticed a lengthy addition to the form: there are a further thirty-nine new panels three-and-a-half pages (pages 5-8 of the CT1) of disclosures to negotiate. Thinking that a company may not need to concern itself with the detail of these disclosures, on the basis that the filer is aware that the filing entity should qualify for one of the exemptions, could prove to be incorrect. Care should be taken that the correct disclosures are made whether or not an interest restriction applies.
Accounting period
The ILR applies only to companies with an accounting period commencing on or after 1 January 2022. The first item is the ILR section of the CT1 is: "If the accounting period commenced on or before 31 December 2021, please tick the box. No further details are required in this section." So for accounting periods starting before 31 December 2021, no disclosures are required (other than ticking this box).
For more information on this please contact Angela Fleming, Head of Financial Services Tax or Yvonne Diamond, Senior Manager, Tax
Content adapted from Irish Tax Review.
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