Commentary

D1.611A Market value rule for intangible assets transfers

Corporate tax
Corporate tax | Commentary

D1.611A Market value rule for intangible assets transfers

Corporate tax | Commentary

D1.611A Market value rule for intangible assets transfers

Where there is a transfer of a 'chargeable intangible asset' from a company to a related party, or vice versa, the transfer is treated for all tax purposes as taking place at market value, regardless of the actual consideration for the transfer1.

A chargeable intangible asset is essentially an asset within the computational rules of the corporate intangible regime.

Where there is a grant of a licence or other right in respect of a chargeable intangible asset by a company to a related party, or vice versa, on or after 22 November 2017, similar market value treatment applies to the grant (other than grants made pursuant to an obligation under a contract which was unconditional before that date)2. An obligation is treated as unconditional for these purposes if it could not be varied or extinguished by the exercise of a right (whether under the contract or otherwise)3.This market value rule does not apply to a restricted asset to which CTA 2009, s 900F applies (see the 'restricted assets' section at D1.603)4.

For the meaning of 'related party', see D1.601B. The references to a related party for times on or after 25 November 2015 include references to the participation condition in TIOPA 2010, s 148 being met or not being met between the persons. The definition of persons for these purposes is also extended for such times to include a reference to a partnership instead of a company5.

The market value rule applies for all

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