Corporation Tax Act 2009 section 847

Transfers involving other taxes

Section 847 partially disapplies the market value rule for transfers of intangible fixed assets between related parties where the other party falls outside the intangible fixed asset rules and the transfer has consequences under distribution or employment income tax provisions.

• Where a company transfers an intangible asset to a related party at below market value, or receives one at above market value, the normal market value substitution rule in section 845 may be switched off in certain circumstances.
• The related party must either not be a company at all, or must be a company for which the asset is not a chargeable intangible asset immediately after (or before) the transfer.
• The transfer must give rise to amounts relevant to someone's tax calculation under the distribution rules (CTA 2010 Chapter 2 of Part 23, excluding section 1000(2)) or the employment income rules (ITEPA 2003 Part 3).
• When both conditions are met, the market value rule is disapplied only for the purpose of those distribution or employment income calculations — it continues to apply for the company that is within the intangible fixed asset regime.