INTM219150 - Controlled Foreign Companies: The CFC Charge Gateway Chapter 9 - Exemptions for profits from Qualifying Loan Relationships: Matched Interest Rule: When does the matched interest rule apply

The matched interest rule in TIOPA10/Part 9A/S371IE applies for an accounting period when:

  1. there remain non-trading finance profits (바카라 사이트淣TFPs바카라 사이트� - INTM203000) in respect of qualifying loan relationships (바카라 사이트淨LRs바카라 사이트� -INTM217000) of the CFC that are not exempt after the application of sections 371IB and 371ID (these are referred to as the 바카라 사이트渓eftover profits바카라 사이트�); and
  2. (apart from the application of this section) profits under Chapters 5, 6 or 9 would be apportioned to a UK resident group company and would be added to that company바카라 사이트檚 financing income for the purposes of the worldwide debt cap rules (under section 314A); and
  3. the 바카라 사이트渢ested income amount바카라 사이트� (TIA) for the group (taken from the calculation under worldwide debt cap rules and including amounts added under section 314A) exceeds the 바카라 사이트渢ested expense amount바카라 사이트� (TEA) of the group (again taken from the calculation under the worldwide debt cap rules).

The extent to which the leftover profits will be exempt will depend on the make-up of the figure of tested income amount, taking account of amounts that would otherwise be added to the UK group companies financing income amounts.

The matched interest rules make use of certain calculated amounts from the worldwide debt cap rules in TIOPA10/Part 7.