Thin capitalisation

Recognising the growing importance of international issues for businesses HMRC have established a new Business International Directorate with effect from 5 January 2009. The director of Business International is Judith Knott.

The financial transfer pricing team has been formed within Business International to take responsibility for certain international tax issues previously dealt with by the specialist financial groups within CT & VAT including thin capitalisation financial services transfer pricing and attribution of profits the investment manager exemption avoidance involving arbitrage and FA 1996 Sch 9 para 13. Financial Transfer Pricing is led by Andrew Martyn.

HMRC have published Revenue & Customs Business Brief 1/09 as guidance to questions which have arisen since the introduction of the process for entering into advance thin capitalisation agreements as introduced by Statement of Practice 4 of 2007.

The advance thin capitalisation agreement process is designed to...