Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Transfer pricing definition

What does Transfer pricing mean? Transfer pricing describes the pricing and terms of transactions between connected companies or related persons, and the adjustments needed so taxable profits reflect an arm’s length result. In practice it covers intra-group supplies of goods and services, royalties and other intellectual property charges, financial transactions (loans and guarantees) and cost allocations. In the UK, the arm’s length principle is enacted in Part 4 of the Taxation (International and Other Provisions) Act 2010 and applied by HMRC consistently with the OECD Transfer Pricing Guidelines. In Ireland, materially similar rules are set out in Part 35A of the Taxes Consolidation Act...

Transfer pricing adjustments in the UK (pre-1 January 2026): self-assessment, compensating adjustments, loans and guarantees, CFCs, individuals, treaty relief, balancing payments, securitisation election, secondary adjustments

Published by a LexisNexis Tax expert

Practice notes

This Practice Note considers how the UK’s Transfer pricing regime applies to chargeable periods (for ease in this Practice Note, called ‘accounting periods’) that start before 1 January 2026. Be aware that the Finance Act 2026 brought in a series of changes to the UK Transfer pricing rules, largely commencing for accounting periods beginning on or after 1 January 2026, subject to certain transitional Rules. For broader background on transfer pricing, see the Practice Notes: Transfer pricing—what is it? and Transfer pricing—key concepts and principles.

Transfer pricing adjustments

Where the UK transfer pricing rules are engaged in relation to a transaction between two parties, the Profits or losses of the so‑called ‘potentially advantaged person’ must be computed for tax as though an arm’s length provision had applied between them, rather than the actual terms. The ‘potentially advantaged person’ is the party that secured a potential UK tax advantage because the relevant transaction was not at arm’s length...

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Web page updated on 22/05/2026

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