Nature and effect of guarantees in thin capitalisation

As explained in INTM413060, a provision may arise from a series of transactions rather than just a single transaction between two connected companies. A loan from a third party which is guaranteed by a connected person constitutes a provision consisting of a series of transactions. The same would apply to a loan from a connected party which is guaranteed by another connected party. The most common instance will be a single loan supported by a single guarantee but the provision could consist of any number and combinations of loans and cross guarantees.

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