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.