Corporation Tax Act 2009

Relationship with transfer pricing rules

161 Transfer pricing rules to take precedence

(1) Section 159 or 160 does not apply if the relevant consideration—

(a) falls to be adjusted for tax purposes under Schedule 28AA to ICTA, or

(b) falls within that Schedule without falling to be so adjusted.

(2) For the purposes of subsection (1)(b), the relevant consideration falls within Schedule 28AA to ICTA without falling to be adjusted under that Schedule if the conditions in paragraph 1(1) of that Schedule are met, but either—

(a) the actual provision does not differ from the arm’s length provision, or

(b) one of the exceptions mentioned in subsection (3) applies.

(3) The exceptions are those in—

(a) section 447(5) (exchange gains or losses from loan relationships)

(b) section 694(8) (exchange gains or losses from derivative contracts),

(c) paragraph 10 of Schedule 28AA to ICTA (transactions and deemed transactions involving oil), and

(d) paragraph 13 of Schedule 28AA to ICTA (saving for provisions relating to capital allowances and capital gains).

(4) In this section “relevant consideration” means—

(a) in relation to section 159, the consideration for the disposal of the trading stock, and

(b) in relation to section 160, the consideration for the acquisition of the trading stock.