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HMRC internal manual

International Manual

Controlled Foreign Companies: Assumed Taxable Total Profits, Assumed Total Profits and the Corporation Tax Assumptions: Disguised Interest

The disguised interest rules in CTA09/Part 6/Ch2A are designed to ensure that where a company is party to an arrangement which produces for the company a return in relation to any amount which is economically equivalent to interest, CTA09/Part 5 (the loan relationships rules) applies as if the return were a profit arising to the company from a loan relationship.

TIOPA10/S371SP ensures that references to a tax advantage at CTA10/S1139(2)(da) include any tax advantage arising under CTA09/S486D(4) as a consequence of the CFC being party to an arrangement that falls within the disguised interest rules in CTA09/Part 6/Chapter 2A.