CIRD45040 - Intangible assets: related party rules: market value rule: interaction with the transfer pricing rules - cross border transfers where transfer pricing adjustment not required

CTA09/PART8/S846

For transfers occurring on or after 1 January 2026, FA26/S47 amended CTA09/S846. See CIRD45038 for the background to these changes.


CTA09/S846 was amended to deal with situations where TIOPA10/PART4 did not impose an adjustment but a value still needed to be determined for the purpose of CTA09/PART8 because the transfer was between related parties. For the definitions of ‘cross-border transfer’ see CIRD45038.

CTA09/S846 applies when

  • the basic rule in CTA09/S845 would apply in relation to a company or a related person, but does not as a result of S845(4ZA) (CTA09/S846(1)(a)), and
  • the profits and losses of that person are not required to be adjusted under TIOPA10/S147 (3) or (5) (CTA09/S846(1)(b)).

Where CTA09/S846 applies, TIOPA10/S147(3) applies to that person (the company and/or the related person) in relation to the provision comprising the transfer, as if:

  • the reference in TIOPA10/S147(3) to the “potentially advantaged person” were to that person, and
  • the reference to the “actual provision” were to the provision comprising the transfer, or the provision to which the transfer forms part of.


FA26/S47 amended TIOPA10/S151 with effect from 1 January 2026 to ensure the cash equivalent is brought into account for the purposes of CTA09/PART8.


The broad effect of the FA26/S47 amendments to CTA09/S845, CTA09/S846 and TIOPA10/S151(3) is to apply the arm’s-length valuation standard to the cross-border transfer of an intangible fixed asset to determine the value of the intangible fixed asset, allowing the value of the intangible fixed asset to be adjusted for the purpose of CTA09/PART8. The two-way street that existed within the previous rule in CTA09/S846(1B) has also been retained for transfers.


For transfers before 8 July 2015

Prior to 8 July 2015 CTA09/S846 also provided that the transfer pricing rules in TIOPA10/PART4 took precedence over the market value rule. That was the case where:

  • the price of a transaction actually needs to be adjusted under TIOPA10/PART4, or
  • no adjustment is required under TIOPA10/PART4 because the consideration actually given was an arm’s length amount but, had the transaction not been on arm’s length terms, a transfer pricing adjustment would have been possible.


For transfers between 8 July 2015 and 31 December 2025


For asset transfers occurring on or after 8 July 2015 and on or before 31 December 2025, S846(1A)–(1C) applies (see CIRD48330).

Points to note

New rules were also introduced from 22 November 2017 to deal with a licence granted between related parties (see CIRD48350). These rules were also amended by FA26/S47 (see CIRD45050).