Part 8Intangible fixed assets
Chapter 13Transactions between related parties
Transfers treated as being at market value
845Transfer between company and related party treated as at market value
1
The basic rule is that a transfer of an intangible asset—
a
from a company to a related party, or
b
to a company from a related party,
is treated for all purposes of the Taxes Acts as being at market value (as respects both the company and the related party) if condition A or B is met.
2
Condition A is that the asset is a chargeable intangible asset in relation to the transferor immediately before the transfer.
3
Condition B is that the asset is a chargeable intangible asset in relation to the transferee immediately after the transfer.
4
That rule is subject to—
a
section 846 (transfers not at arm's length),
b
section 847 (transfers involving other taxes),
c
section 848 (tax-neutral transfers), and
d
section 849 (transfers involving gifts of business assets).
5
In subsection (1)—
“market value” means the price the asset might reasonably be expected to fetch on a sale in the open market, and
“the Taxes Acts” means the enactments relating to income tax, corporation tax or chargeable gains.