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HMRC internal manual

Corporate Finance Manual

Debt cap: income from EEA group companies: conditions to be met

This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.

Conditions in TIOPA10/S299

The three conditions that have to be met before a financing income amount could be exempted by TIOPA10/S299 are as follows:

Condition A is that, at the time the payment is received, the payer is a relevant associate of the recipient (see CFM92850).

Condition B deals with the residence for tax purposes of the payer. It requires that when the payment is received the payer is tax resident in a European Economic Area (EEA) territory and is liable to a tax in that territory chargeable by reference to profits, income or gains arising to the payer (see CFM92860).

Condition C is that EEA tax relief for the payment is not available to the payer in the current period or in any previous or future period. Guidance on condition C is given in more depth in CFM92890 onwards.