BIM60615 - Profits from a trade of dealing in or developing UK land: Anti-fragmentation: Example

Example

In the situation above, 바카라 사이트˜Dealer바카라 사이트™ is subject to the new charge, as 바카라 사이트˜Dealer바카라 사이트™ will realise a profit from the disposal of UK Land.

In this case 바카라 사이트˜Dealer바카라 사이트™ does not have the assets (e.g. cash) or employees to manage the risk comprised in the development. Instead, the risks associated with the development are funded by 바카라 사이트˜Devco바카라 사이트™.

In this example 바카라 사이트˜Devco바카라 사이트™ performs many of the significant people functions (SPFs), and as such is paid the majority of the profits realised from the sale of the UK property. This is done in a manner that is designed to be compliant with UK transfer pricing methodologies.

The contribution 바카라 사이트˜Devco바카라 사이트™ is making to the development of the land is not insignificant and the anti-fragmentation rules will apply in this case.

  • 바카라 사이트˜Dealer바카라 사이트™ has disposed of land in the UK,
  • Condition A is met in relation to the land, and
  • 바카라 사이트˜Devco바카라 사이트™ has made a relevant contribution to the development of the land by assuming the risk.

Any profit realised by 바카라 사이트˜Devco바카라 사이트™ will be taxed on 바카라 사이트˜Dealer바카라 사이트™ as if 바카라 사이트˜Dealer바카라 사이트™ and 바카라 사이트˜Devco바카라 사이트™ were one entity. Only profits of 바카라 사이트˜Devco바카라 사이트™ that are directly attributable to Dealer are taxed in that entity, while Devco바카라 사이트™s other [unrelated] profits remain taxable in 바카라 사이트˜Devco.바카라 사이트™

If 바카라 사이트˜Devco바카라 사이트™ is a UK resident Section 356OC(3) would provide relief, so far as the profits would be brought into account as income in calculating profits (of any other person).