As detailed in D4.431, a chargeable company may make a claim for exemption of certain intra-group non-trading finance profits that would otherwise pass through the CFC charge gateway because they fall within Chapter 5 (D4.427).
In order to make this claim, the profits must arise from qualifying loan relationships (QLR) and the business premises condition at TIOPA 2010, s 371DG (D4.426) must also be met. For these purposes a QLR is, in brief, a loan relationship where the CFC is creditor, the ultimate debtor is a company connected with the CFC (not within the charge to UK tax in respect of the debt payments) and controlled by the same UK resident persons who control the CFC1.
Exclusions from QLRs
There are a number of exclusions to the QLR definition as set out below2.
Exclusion 1—loan used for UK PE or UK property business
If the ultimate debtor is a non-UK resident company, the creditor relationship cannot be treated as a QLR if some or all of the company debits are
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