Section 444 | Transactions not at arm's length: general

(1)If—

(a)credits or debits in respect of a loan relationship of a company are to be brought into account for the purposes of this Part in respect of a related transaction, and

(b)that transaction is not a transaction at arm's length,

those credits or debits are to be determined for the purposes of this Part in accordance with the independent terms assumption.

(2)The independent terms assumption is that the transaction was entered into on the terms on which it would have been entered into between knowledgeable and willing parties dealing at arm's length.

(3)This section is subject to section 445 (disapplication of this section where Part 4 of TIOPA 2010 applies).^F1

(4)Subsection (1) does not apply to debits arising from the acquisition of rights under a loan relationship if those rights are acquired for less than market value.

(5)In a case where the related transaction is a transaction within section 336(2) or part of a series of transactions within 336(3) (group transactions), subsection (1) does not apply if—

(a)section 340 (group transfers and transfers of insurance business: transfer at notional carrying value) applies as a result of that transaction or, as the case may be, that series of transactions, or

(b)section 340 would so apply apart from section 341 (transferor using fair value accounting).

(6)Subsection (1) does not apply to exchange gains or losses (but see sections 448 and 452).^F2