Corporation Tax Act 2009 section 484

Provision not at arm's length: meaning of "interest" and "money debt"

Section 484 extends the meaning of "interest" and "money debt" within this chapter to cover situations where transfer pricing rules apply to transactions not conducted at arm's length.

• Where transfer pricing rules (Part 4 of TIOPA 2010) deem an amount to be interest on a money debt, that amount is treated as interest for the purposes of this chapter.
• Where transfer pricing rules create a notional debt — an amount treated as if it were a money debt — any deemed interest on that notional debt is also caught by this chapter.
• The notional debt itself is treated as a money debt for all purposes within this chapter, so all relevant provisions apply to it.
• This ensures that non-arm's length arrangements between connected parties cannot escape the rules in this chapter simply because the amounts involved are not, in strict legal terms, interest or money debts.