Corporation Tax Act 2009 section 27

Loans: attribution of financial assets and profits arising

Section 27 explains how loans and other financial assets held by a non-UK resident bank, and the profits arising from them, should be attributed to a UK permanent establishment based on the activities that generated them.

• Applies to non-UK resident companies that are banks and that make loans or hold other financial assets
• Loans and related profits are attributed to the UK permanent establishment to the extent they were generated by its activities, following the separate enterprise principle
• Key factors include the permanent establishment's role in sourcing new business, assessing credit risk, negotiating terms, and deciding whether to make or extend the loan
• Additional factors may include concluding the loan agreement, disbursing proceeds, administering the loan, and managing any pledged securities