INTM573150 - Thin capitalisation: filling in form 4450/1
What to do with a completed form 4450/1
There are two occasions when a form 4450/1 needs to be sent to CAR Residency:
- Immediately upon receipt it is necessary to identify the person
who will be responsible for dealing with the particular case, fill
in the details on the form 4450/1, and send it by e-mail to the
relevant CAR Residency e-mail address.
- When a form 4450/1 has been fully completed, the form filler will have obtained a detailed working knowledge of the loan in question and of the circumstances surrounding it. It should then be possible to decide whether the company or group is thinly capitalised within the meaning of the UK rules. If the loan has been made at arm’s length the legislation does not apply, and it is possible to return a copy of the form to HM Revenue & Customs’ CAR Residency with a recommendation that treaty clearance be given – see INTM574000 onwards. If it seems necessary to seek an adjustment under the UK legislation, the next action depends upon who is going to undertake that action. If the monetary limit for mandatory referral to the Thin Cap/Arbitrage Group at CT & VAT, International CT (see INTM572030) has not been exceeded, it is the person who has completed the form who will conduct an enquiry and will need to:
- inform CAR Residency that there is an objection to treaty clearance being given
- begin a pre-return enquiry (see INTM572020) or an enquiry into the appropriate return(s)
- return the form 4450/1 to CAR Residency upon completion of the enquiry, with a recommendation regarding treaty clearance – see INTM574000 onwards.
If the monetary limit has been exceeded, the completed form should be sent to the Thin Cap/Arbitrage Group at CT & VAT, International CT, along with all the other material listed on the form, for attention of the Registry. A member of International CT will look at the case and decide on one of a number of courses of action – see INTM572030.
