Corporation Tax Act 2009 section 28

Borrowing: permanent establishment acting as agent or intermediary

Section 28 deals with how to attribute profits and capital to a UK permanent establishment of a non-UK resident bank when that establishment borrows funds on behalf of another part of the company, acting only as an agent or intermediary.

• This section applies only where the non-UK resident company is a bank
• The permanent establishment must be borrowing funds for the purposes of another part of the company, acting solely as an agent or intermediary
• Under the separate enterprise principle, the profits and capital attributed to the permanent establishment should be those appropriate for an arm's length agent
• The attribution must take into account the risks and costs actually borne by the permanent establishment in carrying out the borrowing