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HMRC internal manual

Corporate Finance Manual

Debt cap: income from EEA group companies: qualifying EEA tax relief

Condition C - no qualifying EEA tax relief

Qualifying EEA tax relief is a deduction or other form of relief that the paying company would receive for the payment of an amount that is a financing income amount in the hands of the recipient.

The financing income amount will not be brought into account for the purposes of corporation tax if, along with the other conditions, condition C in TIOPA10/S263 is met. Qualifying EEA tax relief for the payment must not be available to the payer either in the current period, a previous period (CFM92900), or a future period.

If relief can be obtained in any period, whether it is or not, condition C is not met and the recipient has to bring the financing income amount into account for the purposes of corporation tax.