INTM573030 - Thin capitalisation: the Advance Thin Capitalisation Agreement: Scope of the ATCA: What types of transactions are within the ATCA regime?

Statement of Practice 04/07 refers to the following examples as being suitable for ATCAs, but this is not intended to be an exhaustive list:

• financing arrangements which would previously have been dealt through the treaty route;
• intra-group funding outside the scope of treaty applications, e.g. involving a quoted Eurobond or discounted bond;
• financing arrangements brought into ICTA88/SCH28AA by the “acting together” rules in ICTA88/SCH28AA/PARA4A (see INTM580030 and INTM461260)
• The financial experts on the Transfer Pricing Team at Business International have in the past been willing to enter into broader transfer pricing discussions in relation to financial businesses, and this process will continue within the ATCA regime, subject to size, complexity, etc.

The ATCA process is not intended to deal with:

• Imputation of interest on outward investment, or the “equity function” argument, except where the issue comes up and falls to be dealt with in the course of dealing with an ATCA;
• CTA09/S441 (formerly FA96/SCH9/PARA13), or other avoidance provisions (see INTM573040)