ICANTaxationCompanies Income Tax: Adjusted Profit2023

Interest paid to a foreign connected person is restricted for tax purposes to:

A20% of earnings before interest, tax, depreciation and amortisation
B30% of earnings before interest, tax, depreciation and amortisationCORRECT
C50% of assessable profit
DNo restriction applies
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Why the answer is B, and why the others tempt you.
The thin capitalisation rule introduced by the Finance Act restricts deductible interest on loans from foreign connected persons to 30% of EBITDA, with the excess carried forward for up to five years.
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