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HMRC internal manual

International Manual

Controlled Foreign Companies: The CFC Charge Gateway Chapter 5 - Non-trading finance profits: Capital investment from the UK: Example of capital investment from the UK- back to back investment via a third party

TIOPA10/S371EC(4)(a)

A UK resident group company deposits funds into a third party bank that makes the funds available as a facility for an overseas group subsidiary of the UK Group. The subsidiary draws down an amount on this facility and invests the amount in a financing CFC which uses the cash to make intra-group loans to other overseas CFCs. The non-trading finance profits arising on these loans will pass through the Chapter 5 charge gateway as the receivables held by the financing CFC derive from a capital contribution made indirectly by a UK connected company under TIOPA10/S371EC(4)(a).