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INTM217140 - CONTROLLED FOREIGN COMPANIES: THE CFC CHARGE GATEWAY CHAPTER 9 - EXEMPTIONS FOR PROFITS FROM QUALIFYING LOAN RELATIONSHIPS: WHAT IS A QUALIFYING LOAN RELATIONSHIP: THE ULTIMATE
DEBTOR RULE - DETAILED APPLICATION: LOANS USED FOR MORE THAN ONE PURPOSE Loans used for more than one purpose For the purposes of the ultimate debtor rule a part of a loan may be treated as
a separate loan. By virtue of TIOPA10/Part 9A/S371IG(6) and (7), where a loan from a CFC to a debtor A is used partly for the purposes of A’s trade and partly to fund a loan to B then there
will be two loans with two ultimate debtors, A and B. In the link to the example diagram below, CFC 1 lends to CFC 2 which acquires a loan to CFC P from CFC 3. CFC P has used the funds for
qualifying purposes under section 371IH. P is the ultimate debtor in respect of the loan from CFC 1 to CFC 2. Use this link to view example Previous page Next page Print this page