It's pretty meaningless

As is typical with US acquisitions of UK entities a new Holding company will have been set up financed with debt. A check the box election is made for US tax purposes which means that in the US the UK company is treated as being part of the US company. Hence for US purposes the loan is disregarded.

For UK tax purposes the loan interest is an allowable deduction if paid within 12 months of the year end. Hence, the US owners get UK tax relief on the acquistion of Manure with no pick up of the receivable in the US. Simples

Posted By: Butterworth, May 17, 15:27:00