Section 849AD | Grants involving other taxes

(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).