Finance Act 2024

Chapter 4 of Part 3 (calculation of adjusted profits) U.K.

50 (1) In section 138(1) (profits adjusted to be before tax), omit “its”.

(2) In section 140 (profits adjusted to be profits before certain purchase accounting adjustments)—

(a) in subsection (2), for “shares” substitute “ownership interests”, and

(b) in subsection (3)—

(i) for “shares” substitute “ownership interests”, and

(ii) for the words from “it” to the end substitute “the members of the group do not have sufficient records to identify the adjustment made with reasonable accuracy.”

(3) In section 142 (excluded equity gain or loss), in subsection (2)(b) omit “other than an interest to which subsection (3) applies,”.

(4) In section 149 (arm’s length requirement for certain transactions), in subsection (6) for “the member” substitute “both that member and the other member”.

(5) In section 150 (tax treatment of transactions between members of a multinational group)—

(a) in subsection (6)—

(i) in paragraph (a), for “in the territory in which the member is located” substitute “that applies to the member”, and

(ii) in paragraph (b), for “that territory” substitute “the territory in which the member is located”, and

(b) after that subsection insert—

“(6A) But—

(a) for the purposes of subsection (6)(b), ignore any accounting period in which there was no standard member of the group in that territory to which the Pillar Two rules applied, and

(b) a standard member of a multinational group is always to be regarded as a high tax member for an accounting period if a transitional safe harbour election applies to it for that period.”

(6) In section 165 (election to have excluded equity gains and losses included), in subsection (2)—

(a) after the words before paragraph (a) insert—

“(a) either—”,

(b) the existing paragraphs (a) and (b) become sub-paragraphs (i) and (ii) of the paragraph (a) inserted above, and

(c) at the end of sub-paragraph (ii) insert “, and

(b) in the case of gains or losses falling within section 142(2)(b), the gains or losses are not in respect of an interest to which section 142(3) applies.”