INTM218855 - Controlled Foreign Companies: The CFC Charge Gateway Chapter 9 - Exemptions for profits from Qualifying Loan Relationships: Full Exemption - Qualifying Resources: What are Qualifying Resources?: Evidence Required: US Sub-groups

US sub-groups can present some particular difficulties with evidence of source of funds, because:

  • US companies do not necessarily prepare statutory accounts;
  • Some US states do not have any requirement to match a distribution with any particular profits or other source of funds. Distributions are permitted on the sole condition that the company remains solvent after the distribution.

In such cases a pragmatic approach will be necessary to determine the most plausible source for funds. For example, funds derived from a distribution will be qualifying resources for a CFC바카라 사이트™s loan to the US providing it is reasonable to suppose that in substance the distribution is sourced from the group바카라 사이트™s US profits. In making this judgement, take account of the following factors (as well as any other factors that may be relevant to the particular case):

  • Does the group have sufficient US sourced profit to make the distribution?
  • Have distributions been made to the US from non-US group subsidiaries that the group intended be subsequently distributed out of the US?
  • Is interest on the loan attributed to US profits or to foreign dividends for US tax purposes?
  • Are there any special factors that link the distribution to non-US sources of value within the group?