PART 4Income tax, corporation tax and capital gains tax
Income tax and corporation tax
40Changes in trading stock not made in course of trade
1
In section 161 of CTA 2009 (changes in trading stock: transfer pricing rules to take precedence), after subsection (1) insert—
1A
Subsection (1B) applies in relation to a disposal or acquisition if—
a
by virtue of subsection (1), section 159 or 160 does not apply, and
b
the market value amount is greater than the Part 4 TIOPA amount.
1B
An amount equal to the market value amount less the Part 4 TIOPA amount is to be brought into account in calculating the profits of the trade (in addition to the Part 4 TIOPA amount).
1C
In subsections (1A) and (1B)—
“market value amount” means the amount referred to in section 159(2)(a) or 160(2)(a);
“Part 4 TIOPA amount” means the amount which, following the application of Part 4 of TIOPA 2010 to the relevant consideration, is brought into account in respect of the relevant consideration in calculating the profits of the trade.
2
In section 172F of ITTOIA 2005 (changes in trading stock: transfer pricing rules to take precedence), after subsection (1) insert—
1A
Subsection (1B) applies in relation to a disposal or acquisition if—
a
by virtue of subsection (1), section 172D or 172E does not apply, and
b
the market value amount is greater than the Part 4 TIOPA amount.
1B
An amount equal to the market value amount less the Part 4 TIOPA amount is to be brought into account in calculating the profits of the trade (in addition to the Part 4 TIOPA amount).
1C
In subsections (1A) and (1B)—
“market value amount” means the amount referred to in section 172D(2)(a) or 172E(2)(a);
“Part 4 TIOPA amount” means the amount which, following the application of Part 4 of TIOPA 2010 to the relevant consideration, is brought into account in respect of the relevant consideration in calculating the profits of the trade.
3
The amendments made by this section apply in relation to a disposal or acquisition made on or after 8 July 2015, unless it is made pursuant to an obligation, under a contract, that was unconditional before that date.
4
For the purposes of subsection (3), an obligation is “unconditional” if it may not be varied or extinguished by the exercise of a right (whether under the contract or otherwise).