Search Legislation

Finance (No. 2) Act 2023

 Help about what version

What Version

 Help about advanced features

Advanced Features

Changes over time for: Paragraph 2

 Help about opening options

Version Superseded: 22/02/2024

Alternative versions:

Status:

Point in time view as at 11/07/2023. This version of this provision has been superseded. Help about Status

Close

Status

You are viewing this legislation item as it stood at a particular point in time. A later version of this or provision, including subsequent changes and effects, supersedes this version.

Note the term provision is used to describe a definable element in a piece of legislation that has legislative effect – such as a Part, Chapter or section.

Changes to legislation:

There are currently no known outstanding effects for the Finance (No. 2) Act 2023, Paragraph 2. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

Intra-group transfers before entry into regimeU.K.

2(1)Sub-paragraph (3) applies where—

(a)assets are transferred from one member of a multinational group to another member of that group,

(b)either—

(i)the Pillar Two rules do not apply to the transferor for the accounting period in which the transfer takes place, or

(ii)an election under paragraph 3(1) (transitional safe harbour) applies in relation to the transferor for that period, and

(c)the transfer took place on or after 1 December 2021.

(2)But sub-paragraph (3) does not apply in relation to a transfer of assets manufactured, or of a class or description sold, in the course of carrying on a trade by the transferor or the transferee.

(3)Where this sub-paragraph applies, for the purposes of Part 3 of this Act—

(a)the value of the assets at the relevant time is the carrying value of the assets in the hands of the transferor immediately before the transfer, and

(b)any deferred tax asset that would arise in relation to the assets in the underlying profits of the transferee is limited to the tax paid amount in relation to the transfer of assets.

(4)For the purposes of this paragraph “the relevant time” means the later of—

(a)the date of the transfer, and

(b)the commencement of the first accounting period in which—

(i)the Pillar Two rules apply to the transferee, and

(ii)an election under paragraph 3(1) (transitional safe harbour) does not apply in relation to the transferee.

(5)Where the relevant time is after the date of the transfer—

(a)the value of the assets at the relevant time is to be adjusted to reflect—

(i)capitalised expenditure incurred in respect of the assets in the period between the date of the transfer and the relevant time, and

(ii)amortisation and depreciation of the assets that, had the transfer not occurred, would have been recognised by the transferor if the transferor had continued to use the accounting policies and rates for amortisation and depreciation of the assets previously used, and

(b)the tax paid amount in relation to the transfer of the assets is to be adjusted to reflect the matters referred to in paragraph (a)(i) and (ii).

(6)To determine the “tax paid amount” in relation to a transfer of assets take the following steps—

  • Step 1

    Determine the amount of the tax expense of the transferor in relation to the transfer of the assets that relates to covered taxes.

  • Step 2

    Determine the amount, if any, of qualifying current tax expense relating to the transfer of the assets that would have been allocated to the transferor as a result of section 177 or 179 (permanent establishments and controlled foreign company regimes) if—

    (a)

    the Pillar Two rules had applied to the group in the accounting period in which the transfer occurred, and

    (b)

    section 179(2) (restriction of allocation of mobile income) were ignored.

  • Step 3

    Add together the amounts determined under Steps 1 and 2.

(7)But the tax paid amount is not to exceed the cap amount.

(8)The “cap amount” in relation to a transfer of assets is the amount given by—

(a)dividing—

(i)the amount of tax expense determined under Step 1 in sub-paragraph (6), by

(ii)the nominal rate of tax to which that expense relates, and

(b)multiplying the result of paragraph (a) by 15%.

(9)Where, ignoring sub-paragraph (7), the tax paid amount in relation to the transfer of assets would exceed the cap amount in relation to it, the filing member may elect that sub-paragraph (3) does not apply in relation to the transfer of assets.

(10)Paragraph 2 of Schedule 15 (annual elections) applies to an election under sub-paragraph (9).

(11)For the purposes of this paragraph, “a transfer of assets” includes a transaction that relates to assets that does not result in a change in their ownership if the transaction has substantially the same economic effect as a change in ownership of those assets.

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources