Section 849AD — Corporation Tax Act 2009: Grants involving other taxes

Grants involving other taxes 849AD 1 This section applies if—

a in a case where section 849AB applies and the licence or other right is granted by the company to a related party, the grant is at less than its market value, b in a case where that section applies and the licence or other right is granted to the company by a related party, the grant is at more than its market value, and c conditions A and B apply.

2 Condition A is that the related party—

a is not a company, or b is a company in relation to which—

i in a case within subsection (1)(a), the licence or other right is not a chargeable intangible asset immediately after the grant to it, or ii in a case within subsection (1)(b), the relevant asset is not a chargeable intangible asset immediately before the grant by it.

3 Condition B is that the grant of the licence or right—

a gives rise to an amount to be taken into account in calculating any person's income, profits or losses for tax purposes because of a relevant provision, or b would do so apart from section 849AB(2) or (3).

4 If this section applies, section 849AB(2) and (3) does not apply in relation to the calculation referred to in subsection (3) for the purposes of any relevant provision.

5 In this section “ relevant provision ” means—

a Chapter 2 of Part 23 of CTA 2010 (matters which are distributions), except section 1000(2),

and b Part 3 of ITEPA 2003 (employment income: earnings and benefits etc treated as earnings).