The ‘borrowing unit’ is the largest grouping whose assets and liabilities are considered in assessing whether or not a borrower is thinly capitalised. It represents (subject to certain provisos) the sum of the borrower's assets and liabilities.

Before 1 April 2004, the borrowing unit for thin cap purposes was defined at ICTA88/S209(8A) as the UK parent company and all its 51% subsidiaries, wherever they were situated. Other group companies, whether in the UK or elsewhere, were excluded.

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