ATCS08500 - Low-risk view on unallowable purpose rules in the loan relationships and derivative contracts regimes: early engagement meeeting
In relation to the possible application for a low-risk view, you may be asked to answer any further initial questions we have about the above two areas, and you are likely also to be asked for an initial explanation as to:
commercial (non-tax) reasons and benefits - what are the commercial (non-tax) reasons for, and benefits to:
- those involved in the arrangements, as a whole
- the companies, for their involvement in the arrangements
- the companies, for being party to the loan relationships and/ or derivative contracts
- loan relationships and/ or derivative contracts - what have the discussions been on the terms of these and the commercial implications for the company/ies, for instance:
- in relation to a loan relationship, what have the discussions been on the interest rate, the size of principal, the terms of interest payment and of principal including maturity, and the ability to service the interest and repay the principal
- in relation to a derivative contract, what have the discussions been on the underlying subject matter, the notional principal, and the maturity of the derivative; if the derivative is used for a hedging purpose, what have the discussions been on the nature of the risk being hedged and whether it was necessary to take on that risk in the first place
- UK tax - what the UK tax consequences are:
- for the arrangements as a whole
- for the companies
- non-UK tax - what the non-UK tax consequences are for the arrangements as a whole; in particular, is there a net global tax benefit (in a general sense, as the term is used in HMRC’s published guidance at CFM38170)?
- how decisions were made about the arrangements and their structuring - how has the proposed structure for the arrangements, and the parts involving the companies and the loan relationships and/ or derivative contracts, developed? What has the process been for making the decisions?
- anything else which you consider relevant for us in reviewing your application
In relation to the possible low-risk view application, it is expected the discussion will be led by the case manager, and may include the Customer Compliance Manager (CCM) or temporary Customer Compliance Manager (TCCM) and members of their team. It is unlikely that the meeting will be attended by a policy or technical lead contact for the regime, although the case managers will have access to specialist colleagues.