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The intangible rules contain a definition of a related party. Deductions
relating to intangibles created prior to 1 April 2002 and then transferred
between related parties are not allowed for corporation tax purposes.
These rules are to be amended to clarify that the companies remain related
parties even when one of the parties is in administration, liquidation or other
insolvency or equivalent arrangements.
Our view
HMRC believe that the related party rules have been used in a number of
tax planning arrangements and this clarification is another measure to
stop this perceived abuse.
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