INTM489280 - The Unassessed Transfer Pricing Profits Process: Partnerships and Lloyds Syndicates

UTPP will apply to accounting periods beginning on or after 1 January 2026.  This guidance will be updated with detailed examples by 1 January 2026.  For earlier accounting periods please use the diverted profits tax guidance at INTM489500

TIOPA10/Schedule 1A

Sometimes companies will have unassessed transfer pricing profits as a result of their membership of a partnership or a Lloyds syndicate.

In these cases the approach for UTPP is very similar to the typical process summarised in INTM489205, but with some changes to recognise that more than one company is likely to be affected and that it will be very difficult, if not impossible, for a company to unilaterally change their returned profits in respect of the partnership, or syndicate. This is because any profits or losses are allocated to that company from a separate return, which was calculated and submitted by someone else.   

As a result, the UTPP legislation contains specific provisions to ensure:

  • a coordinated approach to assessment, amendment and appeal
  • that the representative partner (of a partnership) or managing partner (of a syndicate) can amend the partnership, or syndicate return to more fully reflect the transfer pricing requirement for corporate partners, or members. This means that some, or all of the unassessed transfer pricing profits are included in the partnership or syndicate tax return
  • that the definition of corporate partner or member includes any indirect corporate partners or members
  • where a partnership or syndicate is made up of a mix of corporates and individuals, the impact of the legislation is restricted to companies

The UTPP legislation recognises that HMRC will often deal with the representative of the partnership, or syndicate who made the return in addressing any enquiries: 

  • the preliminary notice will be issued to the representative partner of a partnership or managing agent of a syndicate 
  • the representative partner or managing agent has the power to make representations and to appeal a UTPP assessment once it becomes final, however 
  • the assessment will be on each corporate partner, or member for their share of the unassessed transfer pricing profits.  It is important that each company is notified of this as soon as possible after the assessment is made.