INTM414010 - Reform of transfer pricing: Introduction to reform of transfer pricing
At Finance Bill 2025-26 the government introduced a balanced package of reforms to simplify and modernise the UK transfer pricing rules, improve tax certainty, and increase alignment with international standards.
A policy consultation on these changes took place in 2023 followed by a technical consultation in 2025. The government published a summary of responses to the technical consultation at Budget 2025.
These reforms amended a number of areas of UK law, including the participation condition, intangibles, Commissioners’ sanctions, UK-to-UK transfer pricing, interpretation in accordance with Organisation for Economic Co-operation and Development (OECD) principles, and financial transactions.
In general, these changes take effect for chargeable periods beginning on or after 1 January 2026. Where there are transitional rules or different commencement provisions, this is confirmed at the relevant parts of this manual.
For chargeable periods beginning before 1 January 2026 the unamended version of Part 4 Taxation (International and Other Provisions) Act 2010 (TIOPA10) remains applicable and as such the appropriate cross references are provided in this guidance along with some amendments to the guidance at INTM4100000.
The reforms to the UK transfer pricing rules sit alongside the government’s proposals to introduce an International Controlled Transactions Schedule (ICTS). This will be subject to a technical consultation in Spring 2026.
This guidance has been provided in advance of these reforms taking effect on 1 January 2026 to support the appropriate application of the new rules. It is intended to focus on the reforms and remains subject to change until Finance Bill 2025-2026 receives Royal Assent.