Thin Capitalisation Agreement

UK transfer pricing and thin capitalisation rules impose a borrowing test for the calculation of an acceptable amount of debt. It can be said that a UK company is poorly capitalised when it has excessive debts in relation to its lending capacity in full competition, resulting in excessive interest rate deductions (UK small cap legislation is a form of anti-prevention legislation). Grant Thornton`s Liz Hughes and Oriana Panidha discuss the small capitalization associated with the increasing revision of the outsourcing nature of interest rates applied to bonding and borrowing. Meeting the requirements of the UK Thin Cap scheme is a complex challenge and the introduction of the ATCA programme was an important step in putting in place a framework to address much of this uncertainty. Since 2007, it has been possible to conclude, under APA legislation, prior small-cap agreements (ATCAs) (see §774-895). . . .