INTM414210 | The participation condition: The participation condition

S148 The participation condition

The participation condition, which is set out at TIOPA10/S148, forms part of the basic pre-condition that must be met for the UK transfer pricing rules to be engaged.

For non-financing arrangements, TIOPA10/S148 is met if one of the two affected persons was directly or indirectly participating in the management, control or capital of the other, or a third person was participating in the management, control or capital of both the affected persons when the actual provision was made or imposed (see INTM412060).

For financing arrangements, TIOPA10/S148 is met where participation occurs within six months of the actual provision being made or imposed.

This section has not been amended.

S157 Direct participation

A person is directly participating in the management, control or capital of another person at a particular time if (and only if) that other person is at that time—

• a body corporate or a firm, and

• controlled by the first person.

TIOPA10/S157(1)(a) is amended to insert a reference to TIOPA10/S148(A)(1)(c) in relation to participation: transfer pricing notice.

Finance Bill 2025-26 introduces TIOPA10/S157(3) to link to a new direct participation test at TIOPA10/S162A.