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TIOPA10/S436(2)(d),(5)(d),(10)

In order to be a qualifying infrastructure company the company must, among other things, meet the public infrastructure income test. This test depends on there being a company which carries out qualifying infrastructure activities. In particular, this would include the provision of a public infrastructure asset.

To be a public infrastructure asset an asset (whether part of UK infrastructure, or a building or part of a building within a UK property business) must pass the group balance sheet test in respect of the company carrying out the qualifying infrastructure activities.

»Ê¹ÚÌåÓýapp group balance sheet test applies at each point in time. It requires that the asset is recognised on the balance sheet of the company, or a company within the worldwide group, or would be recognised on such a balance sheet if one was drawn up at that time. »Ê¹ÚÌåÓýapp company which recognises the asset must be subject to UK Corporation Tax in respect of all sources of its income. As such it must not have:

• made an election to exempt its profits or losses from an overseas permanent establishment (under CTA09/S18A) which has effect for the accounting period spanning that time; nor
• made a claim for double taxation relief (under TIOPA10/Part 2/Chapter 2) for that same accounting period.

Example

An gas interconnector (a physical link allowing the transfer of gas across borders), connecting the UK transmission network, with a mainland European countries network is owned by a UK company subject to corporation tax on all of its income. A European tax authority considers that 50% of the interconnector is considered a permanent establishment in its territory and subjects a similar proportion of income to its own corporation tax in its territory. If the UK company claims relief for this double taxation, the interconnector cannot be considered a public infrastructure asset.