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Corporation Tax Act 2009

Changes over time for: Cross Heading: Transactions not at arm's length: general

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Changes and effects yet to be applied to Part 5 Chapter 15 Crossheading Transactions-not-at-arms-length-general:

  • S 1217N(3) modified by 2010 c. 4 s. 357UI (as inserted) by 2015 c. 21 s. 1

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

Whole provisions yet to be inserted into this Act (including any effects on those provisions):

Transactions not at arm's length: generalU.K.

444Transactions not at arm's length: generalU.K.

(1)If—

(a)credits or debits in respect of a loan relationship of a company are to be brought into account for the purposes of this Part in respect of a related transaction, and

(b)that transaction is not a transaction at arm's length,

those credits or debits are to be determined for the purposes of this Part in accordance with the independent terms assumption.

(2)The independent terms assumption is that the transaction was entered into on the terms on which it would have been entered into between knowledgeable and willing parties dealing at arm's length.

(3)This section is subject to section 445 (disapplication of this section where [F1Part 4 of TIOPA 2010] applies).

(4)Subsection (1) does not apply to debits arising from the acquisition of rights under a loan relationship if those rights are acquired for less than market value.

(5)In a case where the related transaction is a transaction within section 336(2) or part of a series of transactions within 336(3) (group transactions), subsection (1) does not apply if—

(a)section 340 (group transfers and transfers of insurance business: transfer at notional carrying value) applies as a result of that transaction or, as the case may be, that series of transactions, or

(b)section 340 would so apply apart from section 341 (transferor using fair value accounting).

(6)Subsection (1) does not apply to exchange gains or losses (but see sections 447 to 452).

Textual Amendments

F1Words in s. 444(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 132 (with Sch. 9 paras. 1-9, 22)

445Disapplication of section 444 where [F2Part 4 of TIOPA 2010] appliesU.K.

(1)Section 444 does not apply, and [F3Part 4 of TIOPA 2010] (provision not at arm's length) applies instead, to credits or debits in respect of amounts which—

(a)fall to be adjusted for tax purposes under [F4that Part], or

(b)are within [F4that Part] without falling to be so adjusted (see subsection (3)).

(2)Subsection (1) applies despite section 464 (amounts brought into account under this Part excluded from being otherwise brought into account), but is subject to—

(a)section 340(7) (disapplication of [F5Part 4 of TIOPA 2010] where group member replaces another as party to loan), and

(b)section 447(5) (disapplication of [F6that Part] for exchange gains and losses).

(3)For the purposes of subsection (1), an amount is within [F7Part 4 of TIOPA 2010] without falling to be adjusted under it in a case where—

[F8(a)the condition in section 147(1)(a) of TIOPA 2010 is met,

(aa)the participation condition is met (see subsection (3A)), and]

(b)the actual provision does not differ from the arm's length provision.

[F9(3A)Section 148 of TIOPA 2010 (when the participation condition is met) applies for the purposes of subsection (3)(aa) as it applies for the purposes of section 147(1)(b) of TIOPA 2010.]

(4)For the way in which this Part applies where adjustments are made under [F10Part 4 of TIOPA 2010,] see section 446.

(5)In this section “the actual provision” and “the arm's length provision” have the same meaning as in [F11Part 4 of TIOPA 2010 (see sections 149 and 151 of that Act)].

Textual Amendments

F2Words in s. 445 title substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(11) (with Sch. 9 paras. 1-9, 22)

F3Words in s. 445(1) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(2) (with Sch. 9 paras. 1-9, 22)

F4Words in s. 445(1)(a)(b) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(3) (with Sch. 9 paras. 1-9, 22)

F5Words in s. 445(2)(a) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(4) (with Sch. 9 paras. 1-9, 22)

F6Words in s. 445(2)(b) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(5) (with Sch. 9 paras. 1-9, 22)

F7Words in s. 445(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(6) (with Sch. 9 paras. 1-9, 22)

F8S. 445(3)(a)(aa) substituted for s. 445(3)(a) (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(7) (with Sch. 9 paras. 1-9, 22)

F9S. 445(3A) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(8) (with Sch. 9 paras. 1-9, 22)

F10Words in s. 445(4) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(9) (with Sch. 9 paras. 1-9, 22)

F11Words in s. 445(5) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 133(10) (with Sch. 9 paras. 1-9, 22)

446Bringing into account adjustments made under [F12Part 4 of TIOPA 2010]U.K.

(1)This section deals with the credits and debits which are to be brought into account for the purposes of this Part as a result of [F13Part 4 of TIOPA 2010] (provision not at arm's length) applying in relation to a company's loan relationships or related transactions.

(2)Subsection (3) applies if under [F14Part 4 of TIOPA 2010] an amount (“the imputed amount”) is treated as an amount of profits or losses arising to a company from any of its loan relationships or related transactions.

(3)Credits or debits relating to the imputed amount are to be brought into account for the purposes of this Part to the same extent as they would be in the case of an actual amount of such profits or losses.

(4)Subsection (5) applies if under [F15Part 4 of TIOPA 2010] an amount is treated as interest payable under any of a company's loan relationships.

(5)Credits or debits relating to that amount are to be brought into account for the purposes of this Part to the same extent as they would be in the case of an actual amount of such interest.

(6)Subsection (7) applies if under [F16Part 4 of TIOPA 2010] an amount is treated as expenses incurred by a company under or for the purposes of any of its loan relationships or related transactions.

(7)Debits relating to the amount are to be brought into account for the purposes of this Part to the same extent as they would be in the case of an actual amount of such expenses.

Textual Amendments

F12Words in s. 446 title substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 134(2) (with Sch. 9 paras. 1-9, 22)

F13Words in s. 446(1) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 134(2) (with Sch. 9 paras. 1-9, 22)

F14Words in s. 446(2) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 134(2) (with Sch. 9 paras. 1-9, 22)

F15Words in s. 446(4) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 134(2) (with Sch. 9 paras. 1-9, 22)

F16Words in s. 446(6) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 134(2) (with Sch. 9 paras. 1-9, 22)

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