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HMRC internal manual

International Manual

Controlled Foreign Companies: The CFC Charge Gateway Chapter 9 - Exemptions for profits from Qualifying Loan Relationships: What is Excluded from the definition of a Qualifying Loan Relationship: Section 371IH(1)

Section 371IH(1)

TIOPA10/Part 9A/S371IH(1) sets out the circumstances under which a loan relationship cannot be a qualifying loan relationship (“QLR” - INTM217000) where the ultimate debtor is a non-UK resident connected company. These are where some or all of the borrower’s debits are being taken into account for the purposes of determining the profits attributable to:

  • a UK permanent establishment of the ultimate debtor under Part 2 of CTA 2009, or 
  • a UK property business of the ultimate debtor under Part 3 of ITTOIA 2005.