(1)Where a member of a multinational group transfers assets or liabilities to another entity in the course of a qualifying reorganisation (see section 212), any gain or loss on the transfer is to be excluded from the adjusted profits of the member, except to the extent it is a non-qualifying gain or loss.
(2)In this section, and in sections 211 and 212, โnon-qualifying gain or lossโ means a gain or loss of the transferee on the transfer of assets or liabilities, and is the lesser ofโ
(a)the amount of that gain or loss that is subject to tax in the territory the transferee is located in, and
(b)the amount of that gain or loss reflected in the underlying profits accounts of the transferee.