PART 1Income tax, corporation tax and capital gains tax
CHAPTER 4Other provisions
Transfer pricing
75Transfer pricing: restriction on claims for compensation adjustments
1
Chapter 4 of Part 4 of TIOPA 2010 (transfer pricing: position of disadvantaged person) is amended as follows.
2
In section 174 (claim by the affected person who is potentially advantaged), in subsection (3), before the entry for section 175 insert— “
section 174A (claim not allowed in some cases where the disadvantaged person is within the charge to income tax),
”
.
3
After that section insert—
174AClaims under section 174 where disadvantaged person within charge to income tax
A claim under section 174 may not be made if—
a
the disadvantaged person is a person (other than a company) within the charge to income tax in respect of profits arising from the relevant activities, and
b
the advantaged person is a company.
4
After section 187 insert—
Treatment of interest where claim prevented by section 174A
187AExcess interest treated as a qualifying distribution
1
Subsection (2) applies if Conditions A to C in section 187 are met in circumstances where section 174A prevents a claim under section 174.
2
The interest paid under the actual provision, so far as it exceeds ALINT, is treated for the purposes of the Income Tax Acts as a dividend paid by the company which paid the interest (and, accordingly, as a qualifying distribution).
5
The amendments made by this section have effect in relation to any amount arising on or after 25 October 2013, except pre-commencement interest.
6
“Pre-commencement interest” means an amount of interest to the extent that it is, in accordance with generally accepted accounting practice, referable to a period before 25 October 2013.