Part 4: Income tax, corporation tax and capital gains tax Section 42: Transfer of intangible assets not at arm's length Details of the section
Section 42 amends section 846 of the Corporation Tax Act (CTA) 2009.
	Subsection (1) inserts new subsections (1A), (1B) and (1C) into section 846 of CTA 2009.
	New subsection (1A) of section 846 of CTA 2009 ensures that, where the transfer pricing rules of Part 4 of the Taxation (International and Other Provisions) Act (TIOPA) 2010 apply, there can also be an adjustment or further adjustment under section 846 of CTA 2009. This ensures that an amount equivalent to the full market value of the intangible asset is used in computing profits for corporation tax purposes. The subsection compares the market value that should be recognised on the transfer of the asset with the amount actually recognised, having applied the transfer pricing rules. If the market value is the higher of the two amounts, subsection (1B) then applies.
	New subsection (1B) of section 846 of CTA 2009 directs that, if the market value amount is greater than the transfer pricing amount, a further adjustment is made to ensure that the amounts recognised for tax purposes in respect of the transfer of the asset are equal to the market value.
	New subsection (1C) of section 846 of CTA 2009 defines the two key amounts - the market value, and the amount brought into account after the application of Part 4 of TIOPA 2010.
	Subsection (2) sets out the commencement rule. The changes have effect for transfers of intangible fixed assets to which section 846 applies that are made on or after 8 July 2015, unless they were made to meet an obligation, under a contract, that was unconditional before 8 July 2015.
	Subsection (3) defines when an obligation is regarded as unconditional for the purposes of the commencement rule in subsection (2).