Taxation (International and Other Provisions) Act 2010 section 204

Meaning of "capital market condition" in sections 199 and 201

Section 204 defines the "capital market condition" that must be met as one of the pre-conditions for making a balancing payment election under the transfer pricing rules.

• The capital market condition requires the relevant provision to form part of a capital market arrangement involving the issue of a capital market investment
• The securities representing the capital market investment must be issued wholly or mainly to independent persons — that is, persons who are not the disadvantaged party and who do not have a participatory relationship with either of the affected persons
• The total value of capital market investments made under the arrangement must be at least £50 million
• A participatory relationship exists only where the person is a company, and either that company and an affected person participate in each other's management, control or capital, or a third party participates in both