Section FM 19 — Income Tax Act 2007: Financial arrangements: transfer for fair and reasonable consideration

FM 19 Financial arrangements: transfer for fair and reasonable consideration When this section applies (1) This section applies in an income year in which a company ( company A ) transfers a financial arrangement to another company ( company B ) when— (a) company A and company B are in the same consolidated group at the time of the transfer; and (b) section FM 18 does not apply to the transfer; and (c) the method of calculating income and expenditure from the financial arrangement does not change after the transfer, and the consolidated group’s return is made on this basis. Consideration for transfer (2) In calculating the base price adjustment, company A’s consideration for the transfer is a fair and reasonable amount of the income that would have been derived, or the expenditure that would have been incurred, by company A in the year of transfer if the transfer had not taken place. Relationship with sections EW 38 and GB 21 (3) This section overrides sections EW 38 (Consideration when disposal for no, or inadequate, consideration) and GB 21 (Dealing that defeats intention of financial arrangements rules). Defined in this Act: amount , company , consolidated group , financial arrangement , income , income year , return of income , Compare: 2004 No 35 s FD 10(4), (4B)