Section 371CEA | Section 371CE: meaning of “group treasury company” ^F1F2

(1)This section makes provision for determining whether the CFC is a group treasury company in the accounting period for the purposes of section 371CE.^F1F2

(2)The CFC is a group treasury company in the accounting period if—^F1F2

(a)it is a member of a worldwide group in relation to a period of account in which the accounting period wholly or partly falls,^F1F2

(b)throughout the accounting period—^F1F2

(i)all, or substantially all, of the activities undertaken by it consist of treasury activities undertaken for the group, and^F1F2

(ii)all, or substantially all, of its assets and liabilities relate to such activities, and^F1F2

(c)at least 90% of its relevant income for the accounting period is group treasury revenue.^F1F2

(3)For the purposes of this section a company undertakes treasury activities for the group if it does one or more of the following in relation to, or on behalf of, the group or any of its members—^F1F2

(a)managing surplus deposits of money or overdrafts,^F1F2

(b)making or receiving deposits of money,^F1F2

(c)lending money,^F1F2

(d)subscribing for or holding shares in a company which is a UK group company undertaking treasury activities for the group at least 90% of whose relevant income is group treasury revenue for its relevant accounting period,^F1F2

(e)investing in debt securities, and^F1F2

(f)hedging assets, liabilities, income or expenses.^F1F2

(4)For the purposes of this section “group treasury revenue”, in relation to a company, means revenue—^F1F2

(a)arising from the treasury activities that the company undertakes for the group, and^F1F2

(b)accounted for as such under generally accepted accounting practice,^F1F2

before any deduction (whether for expenses or otherwise).

(5)But revenue consisting of a dividend or other distribution is not group treasury revenue of the company unless it is from a company that meets the conditions in subsection (3)(d).^F1F2

(6)In this section—^F1F2

“debt security” has the same meaning as in the Handbook made by the Financial Conduct Authority or Prudential Regulation Authority under the Financial Services and Markets Act 2000 (as the Handbook in question has effect from time to time),

“period of account” has the same meaning as in Part 10,

“relevant accounting period” has the same meaning as in Part 10,

“relevant income”, in relation to a company, means income—before any deduction (whether for expenses or otherwise),

(a)arising from the activities of the company, and

(b)accounted for as such under generally accepted accounting practice,

“UK group company” has the same meaning as in Part 10, and

“worldwide group” has the same meaning as in Part 10.