Taxation (International and Other Provisions) Act 2010 section 162

Indirect participation: further financing cases

Section 162 addresses situations where a person who acts together with others to provide financing arrangements to one of the affected persons in a transaction can be treated as indirectly participating in the management, control or capital of each affected person, thereby bringing the transaction within the scope of the transfer pricing rules.

• Where a person ("Q") acts together with others in relation to financing arrangements for an affected person that is a body corporate or firm, Q can be treated as indirectly participating in both affected persons if, when Q is attributed the rights and powers of those other persons, Q would be taken to have control of both affected persons.
• It does not matter whether Q and the others acted together at the time the actual provision was made or at some earlier time — what matters is that they acted together in relation to the financing arrangements at some point.
• The test for whether Q would have control is applied either at a time when the parties were acting together, or within six months after they ceased to do so.
• When determining whether Q has control, the rights and powers of any person (not just Q) include rights attributed through connected persons and nominees under the broader indirect participation rules in section 159.