Corporation Tax Act 2009 section 445

Disapplication of section 444 where Part 4 of TIOPA 2010 applies

Section 445 explains when the transfer pricing rules in Part 4 of TIOPA 2010 take priority over the general non-arm's length transaction rule in section 444 for loan relationship credits and debits.

• Where a loan relationship transaction falls within the scope of the transfer pricing rules in Part 4 of TIOPA 2010, those rules take priority and the general non-arm's length rule in section 444 is switched off.
• This applies both where amounts are actually adjusted under the transfer pricing rules and where the transaction falls within the scope of those rules but no adjustment is needed because the actual terms already match arm's length terms.
• There are two exceptions to this priority: where a group member replaces another as party to a loan (section 340(7)), and in respect of exchange gains and losses (section 447(5)), in which cases the transfer pricing rules do not override section 444.
• Where transfer pricing adjustments are made under Part 4 of TIOPA 2010, section 446 explains how those adjustments are brought into account within the loan relationships rules.