Facts
1
A loan was made from a resident group company to a Dutch subsidiary of the group. The loan was evidenced by a written agreement. 2. Funds were initially used directly and indirectly for the purposes of exploration and production. 3. The loan was not subordinated. 4. Subsequent amounts were loaned and used for the purpose of acquiring shares in an overseas public company. 5. Interest was calculated and accrued in the Netherlands under the terms of the original loan agreement. Apart from one initial payment no interest was actually paid to the resident lender. 6. Tax deductions were claimed for this accrued interest in the Netherlands. 7. Large repayments of loan capital have occurred. 8. The loan was repaid.