»Ê¹ÚÌåÓýapp

Background

As explained at CIRD48320, an accounting step-up scheme seeks to take advantage of CTA09/S846 where that gave priority to transfer pricing adjustments under TIOPA10/PART4. F(2)A15/S42 amended CTA09/S846 to counter such schemes in relation to transfers (see CIRD48330).

»Ê¹ÚÌåÓýapp FA18/S20 amendment to CTA09/S739 (proceeds of realisation) is a response to variants of this avoidance scheme. This amendment is summarised in the guidance below.

FA18 also introduced new legislation at S21 that extends the market value rules at CTA09/S845 to a licence granted between related parties. »Ê¹ÚÌåÓýapp new legislation is inserted into CTA09/PART8 at S849(AB)-(AD) and is explained at CIRD48350.

New CTA09/S739(1A)

FA18/S20 amended CTA09/S739 to clarify what amounts are to be brought into account as proceeds of realisation for the purpose of computing a credit or debit under CTA09/CHAPTER 4 (Realisation of Intangible Fixed Assets).

CTA09/S739(1A) provides that where the consideration is wholly or partly non-monetary, the amount to be brought into account is the equivalent in cash to the thing received, based on its market value. For example; if an Intangible Fixed Asset is exchanged for shares, the proceeds of realisation is the market value of those shares.

»Ê¹ÚÌåÓýapp change is effective for transactions occurring on or after 22 November 2017, unless the realisation was in respect of an unconditional contractual obligation that existed before that date.