Transfer pricing meaning

Checklist This Checklist sets out the principal direct and indirect tax considerations that a corporate borrower within the scope of UK corporation tax (a UK corporate borrower) ought to assess both prior to entering into a loan and over the life of that loan... It is designed to be used as a Checklist by the tax adviser to a UK corporate borrower, offering a concise outline of the relevant tax matters and providing space for the adviser to record notes... This Checklist proceeds on the basis that: the borrower is a company within the charge to UK corporation tax in relation to the loan, that is, either a UK tax resident company or a non‑UK tax resident company for which the loan is attributable to its UK permanent establishment (a UK PE), or attributable to the non‑UK resident company’s trade of dealing in or developing UK land; and the borrower and the lender are unconnected parties dealing at arm’s length ...

This checklist presents core tax queries to raise with a joint venture counterparty. The goal is to identify the principal UK tax considerations that could arise for the remaining joint venture participant(s) and/or any joint venture vehicle, with those potential matters highlighted in the list. It is assumed that the parties are UK tax resident corporate entities and that any joint venture vehicle will also be UK tax resident. The following Practice Notes give further detail on the UK tax issues signposted in this checklist and highlighted in this checklist as follows: The tax consequences of contractual joint ventures The tax consequences of establishing a joint venture partnership The tax consequences of operating and terminating a joint venture partnership The tax consequences of establishing a joint venture company The tax consequences of operating and terminating a joint venture company The tax consequences of international joint ventures The transfer pricing and joint ventures The tax influences on choice of joint venture...

Call or put option? In a call option, the purchaser holds the reins, as it may demand transfer of the asset. The seller should recognise that its intentions for the site could be curtailed by that right, and plans for the property restricted. A put option, by contrast, places control with the seller, enabling it to require the purchaser to take the property and complete the acquisition, obliging the buyer to buy. Option period For a call option, the vendor should be mindful that the land could be effectively frozen throughout the option window, potentially sterilising its use. Accordingly, the deal ought to state a clear long‑stop date to cap the period. The Perpetuities and Accumulations Act 2009 (PAA 2009) removed the rule against perpetuities for options, so those granted on or after 6 April 2010 do not need a specified long‑stop date in this context. Before PAA 2009, a call option lapsed if not exercised within 21 years. Where exercise depends on the buyer securing...

In this issue: Advertising, marketing and sponsorship Agency and distribution Consumer protection Contracts Contractual joint ventures International Daily and weekly news alerts Dates for your diary Trackers New and updated content Advertising, marketing and sponsorship ASA rulings—19 March 2025 A single complaint was made to the Advertising Standards Authority (ASA) about Haven Leisure Ltd’s claims on holiday pricing. The ASA upheld the complaint. See: LNB News 19/03/2025 11. Agency and distribution Recovery Partners GP Ltd v Rukhadze [2025] UKSC 10 The Supreme Court dismissed the appellants’ appeal against an order to account for profits earned in breach of duty; they were employees of the respondent companies and owed fiduciary duties. The court affirmed strict adherence to the fiduciary ‘no profit’ rule, rejecting arguments for a ‘but for’ causation test and for counterfactual enquiries into whether the gains could have been authorised if consent had been sought. See: Recovery Partners GP...

In this issue: Companies and corporation tax Stamp taxes VAT Individuals and income tax Taxes management and litigation Employment taxes Budget and Finance Bills Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Companies and corporation tax Court of Appeal decides interest on intra-group loans not restricted under transfer pricing rules but debits disallowed under unallowable purpose rule (BlackRock Holdco 5, LLC v HMRC) BlackRock Holdco 5, LLC v HMRC [2024] EWCA Civ 330 considers whether, for UK tax purposes, interest on intra‑group borrowing put in place to help fund a commercial acquisition is deductible. Two principal points were before the Court of Appeal: the transfer pricing analysis and the loan relationships unallowable purpose question. On the transfer pricing limb, the Court of Appeal allowed the taxpayer’s appeal. As a result, deductions for interest on the intra‑group loans were not curtailed by the transfer...

In this issue: Brexit headlines Brexit SIs Post-Brexit transition guidance Constitutional and administrative law Equality and human rights Subsidy control and State aid Public procurement Management and strategic planning Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Brexit headlines ESC publishes fifth Report of Session 2023–2024 The European Scrutiny Committee (ESC) has released its fifth Report for Session 2023–2024, covering items considered at that meeting too. At its 13 December 2023 meeting, the ESC reviewed Windsor Framework material from the Department for Environment, Food & Rural Affairs (DEFRA) on formaldehyde and legislative changes to EU Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) rules. The Committee also examined Trade and Cooperation Agreement papers from the Foreign, Commonwealth & Development Office (FCDO) concerning electric accumulators and electrified vehicles. See: LNB News 14/02/2024 27. Brexit SIs Railways (Revocation and Consequential Provision) Regulations...

Stop Press : From accounting periods starting on or after 1 January 2026, the Diverted Profits Tax is superseded by the unassessed transfer pricing profits rules. This Practice Note, alongside Transactions in UK land—tax rules, examines the anti-avoidance provisions aimed at countering attempts to sidestep tax on income, profits or gains connected with arrangements concerning, or trades of dealing in, land. The main anti-avoidance measure seeks to treat gains of a capital character realised on the disposal of land as income, bringing them within income tax or corporation tax. Further detail appears in Practice Note: Transactions in UK land—tax rules. From 5 July 2016 these rules superseded and expanded the former transactions in land rules (for information on prior rules, see Practice Note: Real estate—anti-avoidance: disposals of land and taxing capital gains as income (pre 5 July 2016) [Archived])...

FORTHCOMING CHANGE relating to UK transfer pricing: At Budget 2025, the government confirmed that it intends to move ahead with a new duty on in‑scope multinationals to submit annual information regarding cross‑border related party transactions and dealings for accounting periods starting on or after 1 January 2027. The detailed rules for the new ‘International Controlled Transactions Schedule’ (ICTS) are expected to be formally issued for technical consultation during spring 2026. A consultation on this measure ran from April through to July 2025. See News Analysis: Budget 2025—Tax analysis—International. This Practice Note reviews the UK transfer pricing rules as they apply to chargeable periods (referred to in this Practice Note for ease and convenience as ‘accounting periods’) commencing before 1 January 2026. Note that the Finance Act 2026 introduced a range of reforms to the UK’s transfer pricing regime, most of which apply for accounting periods beginning on or after 1 January 2026, subject to specified transitional provisions. For wider background on transfer pricing, see Practice Notes: Transfer pricing—what is...

Successive UK governments have aimed to cement the UK as one of the world’s most appealing settings for innovation and enterprise. To that end, a wide-ranging suite of tax incentives has been rolled out to encourage innovative companies, supporting both investors and trading entities, and assisting businesses at every phase of a business’s life cycle. These incentives include: R&D tax reliefs patent box business asset disposal relief (previously entrepreneurs’ relief) capital allowances for purchases of: knowhow patents, and plant and machinery venture capital trusts the enterprise investment scheme, and the seed enterprise investment scheme This Practice Note outlines the UK position on key tax considerations when determining how to structure an innovative business with international or global aspirations. The observations are general in nature and work on the basis of a clean slate; revisiting an existing IP ownership arrangement will inevitably demand a bespoke solution (notably...

When choosing an electronic verification provider, you should be able to show sufficient understanding of the provider’s (i) system inputs; (ii) the data sources the system uses to confirm identity; (iii) the system’s outputs and what they signify; and (iv) how the system aligns with the relevant provisions of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692, as amended. Completing this questionnaire will help you reach a risk‑based judgement on whether, at its stated level of assurance, the provider’s systems deliver an appropriate degree of reliability and independence given the potential risks. 1 General Company name [ Insert company name ] Registered address [ Insert address ] Main country of operation [ Insert country ] Additional countries of operation [ Insert country ] Primary contact (name, role and contact information) [ Insert primary contact ] What are the operating hours? [ Insert details ] How is pricing structured? [...

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Insert the following as new definitions (if not already included) in the articles of association of the relevant company: Definitions include: Bad Leaver; Good Leaver (loss of subsidiary status, death, Investor‑assessed incapacity, or retirement at normal age); Garden Leave; Employee Trust (s.86 IHTA 1984); Fair Value (Art 1.6); Family Member/Trust; Financing Documents; Independent Expert; Issue Price; Leaver and related terms. Insert the following as a new article in the company’s articles of association: 1 Leavers Applies to Leavers and Leaver’s Shares. Within one year of Leaving Date Investor may require the Company to issue a Sale Notice offering Shares to recipients (including the Company/Employee Trust). The Leaver must complete transfer at the Sale Price within five Business Days. On default the Company may execute and register transfers or cancel its purchase; once effected it is final. Good Leavers receive Fair Value; Bad Leavers the lower of Issue/acquisition price and Fair Value. Fair Value is agreed with Investor Consent within 10 Business Days or determined by an Independent...