Tax deductibility of financing costs is limited in the North Sea tax regime; therefore it is very important to take into account tax considerations when looking at the correct structuring of the financing for North Sea deals.
Inter-company financing can also be affected by tax considerations, particularly where assets have been transferred between connected companies.
Transfer pricing is also relevant when looking at the amount a company can acceptably borrow from a tax perspective, as well as the rate of interest it pays on those borrowings.
The share capital of a company must also be appropriate but currently it is easier to adjust the level of share capital up and down.
Additionally, interest free loans can be justified in certain circumstances.
In all these areas CW Energy has assisted its clients to arrive at optimal funding structures to ensure that tax benefits are maximised.