Finance Act 1994

166 Transfers of value to associated companies

(1) Subsection (2) below applies where subsection (2) of section 165 above applies and either—

(a) the transfer of value by the qualifying company is to an associated company which is itself a qualifying company; or

(b) the transfer of value by the qualifying company is to an associated third party, and the transfer of value mentioned in subsection (8) of that section—

(i) is to an associated company which is itself a qualifying company, and

(ii) results from that company entering into a relevant transaction.

(2) For the corresponding accounting period or periods of the associated company, there shall be deducted from amount A or, as the case may require, added to amount B an amount equal to the value transferred to the associated company.

(3) Subsection (3) of section 165 above shall (with the necessary modifications) apply for the purposes of subsection (2) above as it applies for the purposes of subsection (2) of that section.

(4) In subsection (2) above “corresponding accounting period or periods”, in relation to the associated company, means the accounting period or periods of that company comprising or together comprising the accounting period of the qualifying company in which the transaction was entered into or the option expired, and any necessary apportionment shall be made between corresponding accounting periods if more than one.

(5) In this section any expressions which are also used in section 165 above shall be construed in accordance with the provisions of that section.