Part 4: Income tax, corporation tax and capital gains tax Section 42: Transfer of intangible assets not at arm's length Background note
When a company transfers intangible fixed to a related party, specific tax rules apply (sections 845 and 846 of CTA 2009). The aim of those rules is to ensure that the full value of the assets is brought into account in computing profits for corporation tax purposes.
	It is also possible that the transfer pricing rules in Part 4 of TIOPA 2010 could apply. The amount recognised after the application of the transfer pricing rules could be lower than the market value, because of the way that the transaction is treated in the accounts. This could have the result that less than the market value is brought into account for tax.
	This change ensures that where transfer pricing rules apply, an adjustment can be made under section 845 of CTA 2009 to ensure that not less than the market value of the transferred assets is brought into account for corporation tax purposes.
	Similar changes are made by section 40 on the transfer of trading stock otherwise by way of trade, and by section 41 in connection with the cessation of a trade.