Part 2Charge to corporation tax: basic provisions
Chapter 4Non-UK resident companies: chargeable profits
The separate enterprise principle: application to non-UK resident banks
26Transfer of financial assets
(1)
This section applies if—
(a)
the non-UK resident company is a bank, and
(b)
there is a transfer of a loan or other financial asset between the permanent establishment and any other part of the company.
(2)
In accordance with the separate enterprise principle, the transfer is recognised only if it would have taken place between independent enterprises.
(3)
The transfer is not recognised if it cannot reasonably be considered that it is carried out for valid commercial reasons.
(4)
For this purpose the obtaining of a tax advantage is not a valid commercial reason.