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HMRC internal manual

Corporate Finance Manual

Other tax rules on corporate debt: transfers of income streams: company transferors: relevant amount

Company transferors: relevant amount

CTA10/S753(2) defines the ‘relevant amount’. This is normally the amount of the consideration for the transfer of the right to the relevant receipts. But where the amount of the consideration is substantially less than the market value of the right to the relevant receipts (or where there is no consideration) then the excess is additionally to be treated as income of the transferor.

The market value rule is likely to apply only where it is clear that the transaction is either not at arm’s length or where the transaction has been structured to make it appear that there is less ‘consideration’ than the value actually given for the right to relevant receipts.