Corporation Tax Act 2009 section 849AC

Grants not at arm's length

Section 849AC resolves the overlap that arises when the consideration for the grant of a licence or other right could be adjusted under both the intangible fixed assets market value rule in section 849AB and the general transfer pricing rules in Part 4 of TIOPA 2010.

• Where both the section 849AB market value adjustment and the TIOPA 2010 transfer pricing adjustment could apply to the same party on the same grant, only the larger of the two adjustments is made
• If the section 849AB adjustment is the greater, the TIOPA 2010 transfer pricing adjustment is disapplied for that party
• If the TIOPA 2010 transfer pricing adjustment is greater than or equal to the section 849AB adjustment, the section 849AB adjustment is disapplied instead
• The effect is that the party is never subject to a double adjustment — only the single, larger correction to consideration applies