INTM507090 – Intra-group funding: group finance companies and the treasury function

Transactions with a group treasury company

Where a UK company has entered into transactions with a group treasury company, there may be

• transfer-pricing issues with regard to the fees charged as well as the rate of interest received or paid
• thin capitalisation considerations
• cash netting issues – to ensure that the benefits of any cash netting are fairly allocated
• Controlled Foreign Companies issues, where the group finance company is owned by a UK group company
• avoidance issues (particularly where a foreign company is financed with significant amounts of equity and the funds are loaned back 'upstream' into the UK) (see INTM509000 onwards).