Thin cap casework means either

undertaking an enquiry into a return, or

negotiating an Advance Thin Capitalisation Agreement (ATCA), a forward agreement- (see INTM520000), which gives a group certainty about the application of the legislation to the UK borrower for the duration of the agreement.

To assess whether and to what extent a company is thinly capitalised, it is essential to understand the activity of the company, its longer-term plans and prospects, and how it manages and structures its finances.

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