Section 217B | Unassessed transfer pricing profits

(1)For the purposes of this Part, a company has unassessed transfer pricing profits for an accounting period if—

(a)the company has made a self-assessment for the period,

(b)provision has been made or imposed as between the company and another person (referred to in this Part as “the other party”) by means of a transaction or series of transactions,

(c)the profits of the company for the period are subject to a transfer pricing requirement in relation to that provision, and

(d)the transfer pricing requirement was not reflected, or is not wholly reflected, in the company’s self-assessment.

(2)The unassessed transfer pricing profits of the company for the accounting period are—

(a)to the extent that the transfer pricing requirement requires profits that are not reflected in the company’s self-assessment to be brought into account, those profits, and

(b)to the extent that the transfer pricing requirement requires losses that are reflected in the company’s self-assessment to not be brought into account, the profits that would, if they were brought into account, produce the same result as not bringing into account those losses.

(3)For the purposes of subsection (2), the references to profits or losses being brought into account are to profits or losses being brought into account in calculating the company’s profit or loss for the period for corporation tax purposes.

(4)The profits of a company are subject to a transfer pricing requirement in relation to the provision if—

(a)the company’s profits and losses are required to be calculated as if the arm’s length provision (within the meaning of Part 4) had been made or imposed instead of the provision, or

(b)an adjustment to the company’s profits and losses that result from the provision is required by virtue of any other enactment where, but for that enactment, paragraph (a) would have applied in relation to the provision.

(5)In this Part “self-assessment” means a self-assessment under paragraph 7 of Schedule 18 to FA 1998 (and where that assessment has been amended, reference to the self-assessment is to that assessment as amended).

(6)This section does not apply to a company in its capacity as a corporate partner of a partnership or a corporate member of a Lloyd’s syndicate (as to which see Schedule A1) (but this does not prevent this section from otherwise applying in circumstances where a company holds an interest in another person whose profits are treated for the purposes of corporation tax as profits of the company).