Matching by a thinly capitalised company

A UK company holding shares in an overseas subsidiary may have a loan from another group company that is wholly or partly matched to the shares, either under CTA09/S328 or under regulation 3 of the Disregard Regulations. For example, if X group wishes to acquire shares in a US operation for $100 million, X plc may borrow $100 million externally and then on-lend the money to a holding company (with a sterling functional currency) that acquires the shares.

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