CFM92515 | Debt cap: particular types of company: definition of dormant company

This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.

Dormant companies

There are a number of provisions in the debt cap rules where a dormant company is excluded from an obligation.

For example, dormant companies are not:

• included in the gateway test

• a party to the appointment of an authorised company for statements of allocated disallowances or exemptions

• included in an election under S331ZA.

The definition of dormant company is in TIPOA/S353 and is a company that is dormant within the meaning of CA06/S1169 which means that it has no significant transactions. A company incorporated outside the UK can similarly be dormant if it has no significant transactions in a period.

However a UK company is not dormant if there are transfer pricing adjustments made for it under TIOPA10/S147 (3) and (5).