Section 75 — Finance Act 2014: Transfer pricing: restriction on claims for compensation adjustments

Transfer pricing: restriction on claims for compensation adjustments 75 1 Chapter 4 of Part 4 of TIOPA 2010 (transfer pricing: position of disadvantaged person) is amended as follows.

2 In section 174 (claim by the affected person who is potentially advantaged), in subsection (3), before the entry for section 175 insert— “ section 174A (claim not allowed in some cases where the disadvantaged person is within the charge to income tax), ” .

3 After that section insert— Claims under section 174 where disadvantaged person within charge to income tax 174A A claim under section 174 may not be made if—

a the disadvantaged person is a person (other than a company) within the charge to income tax in respect of profits arising from the relevant activities, and b the advantaged person is a company.

4 After section 187 insert— Treatment of interest where claim prevented by section 174A Excess interest treated as a qualifying distribution 187A 1 Subsection (2) applies if Conditions A to C in section 187 are met in circumstances where section 174A prevents a claim under section 174.

2 The interest paid under the actual provision, so far as it exceeds ALINT, is treated for the purposes of the Income Tax Acts as a dividend paid by the company which paid the interest (and, accordingly, as a qualifying distribution).

5 The amendments made by this section have effect in relation to any amount arising on or after 25 October 2013, except pre-commencement interest. 6 “ Pre-commencement interest ” means an amount of interest to the extent that it is, in accordance with generally accepted accounting practice, referable to a period before 25 October 2013.