INTM572030 - Thin capitalisation: an overview of thin cap work: Referrals to Business International - monetary limits
In the past, there were monetary limits which triggered mandatory referral of potential thin capitalisation cases to the Transfer Pricing Team at Business International There are no longer fixed limits, except in private equity cases, where the team will retain an interest in deals of £1bn or more.
The Transfer Pricing Team is less concerned with a monetary limit than with the issues which arise on a case, though some involvement may be necessary and inevitable in relation to the largest cases, where the greatest complexity of tax planning may accompany the largest financial transactions and where litigation may be a possible outcome. Some of the “issues” which might still prompt contact with the team are set out at INTM572035. Now that there is a network of specialists outside Business International, it is likely that cases will be the responsibility of the Transfer Pricing Group or International Issues Managers, either in Local Compliance or the Large Business Service, with any appropriate input from the Transfer Pricing Team at 100 Parliament Street.
It is vital that the Transfer Pricing Team is alerted when there is any prospect of litigation on a transfer pricing issue.
It is important that the Transfer Pricing Team maintains a level of direct involvement in a range of cases in order to maintain contact with current trends and novel challenges, to provide useful practical support, and ensure consistency and good practice. For example, unusual terms regularly appear in draft agreements sent to HMRC, some of which are acceptable, being simply tailored to meet particular circumstances, while others test the current boundaries of what HMRC finds reasonable. The financial transfer pricing specialists need an overview of such variations and if necessary will provide a concerted response.
Requests for advice and support from the Transfer Pricing Team at Business International may be made by phone or email in cases where local support is unavailable or unsuitable, though in complex cases a more detailed technical submission will be needed. Requests and referrals should first go through the local Transfer Pricing Specialist, who will be responsible for the governance process - see INTM452030.
