188体育

Example

In the situation above, 鈥楧ealer鈥� is subject to the new charge, as 鈥楧ealer鈥� will realise a profit from the disposal of UK Land.

In this case 鈥楧ealer鈥� does not have the assets (e.g. cash) or employees to manage the risk comprised in the development. Instead, the risks associated with the development are funded by 鈥楧evco鈥�.

In this example 鈥楧evco鈥� performs many of the significant people functions (SPFs), and as such is paid the majority of the profits realised from the sale of the UK property. This is done in a manner that is designed to be compliant with UK transfer pricing methodologies.

The contribution 鈥楧evco鈥� is making to the development of the land is not insignificant and the anti-fragmentation rules will apply in this case.

• 鈥楧ealer鈥� has disposed of land in the UK,
• Condition A is met in relation to the land, and
• 鈥楧evco鈥� has made a relevant contribution to the development of the land by assuming the risk.

Any profit realised by 鈥楧evco鈥� will be taxed on 鈥楧ealer鈥� as if 鈥楧ealer鈥� and 鈥楧evco鈥� were one entity. Only profits of 鈥楧evco鈥� that are directly attributable to Dealer are taxed in that entity, while Devco鈥檚 other [unrelated] profits remain taxable in 鈥楧evco.鈥�

If 鈥楧evco鈥� is a UK resident Section 356OC(3) would provide relief, so far as the profits would be brought into account as income in calculating profits (of any other person).