BIM45782 - Specific deductions: interest: alternative finance arrangements: transfer pricing

If an alternative finance arrangement is not on arm’s length terms and as a consequence ICTA88/SCH28AA applies then the contract is excluded from the alternative finance arrangements legislation in FA05. This is to prevent persons obtaining the benefit of the alternative finance arrangements legislation if cross border financing is used which exploits non- taxation in an overseas jurisdiction.

There is more detail on this at CFM6059.