INTM610070 - Profit Fragmentation Arrangements: The Material Provision

The Material Provision condition at paragraph 2(1)(a) Schedule 4 Finance Act 2019 requires there to be a provision made or imposed between the resident party and the overseas party by means of the arrangements.

바카라 사이트淎rrangement바카라 사이트� is defined in the Profit Fragmentation legislation to include:

  • any agreement, scheme, transaction or understanding (whether or not legally enforceable), and
  • a series of arrangements or a part of an arrangement.

The definition of 바카라 사이트渁rrangement바카라 사이트� is wide and covers arrangements that arise from a legal agreement between parties through to arrangements that rely only on an oral understanding.

The second bullet point means that an 바카라 사이트渁rrangement바카라 사이트� includes a series of arrangements or transactions, making it possible to consider the overall transactions or arrangements as a whole when considering the purpose of an arrangement.

Similarly, an 바카라 사이트渁rrangement바카라 사이트� can be a part of an arrangement that exists within a wider whole and the focus can be on that narrower part of the overall arrangement when considering its purpose.

If the resident party is a member of a partnership the concept of a provision made or imposed is extended. This means that where a provision is made or imposed between a partnership of which the resident party is a member and the overseas party it is treated as a provision made or imposed between the resident party and the overseas party.

The definition of 바카라 사이트渁rrangement바카라 사이트� can include partnership agreements. More details on the application of the Profit Fragmentation legislation to partnerships can be found at INTM610040.

The term 바카라 사이트減rovision바카라 사이트� is explained in more detail in the International Manual at INTM412050.

Example 5 바카라 사이트� Provisions for Partnerships

A is a UK-resident individual who is carrying on a trade in partnership with a number of other individuals as P Associates. P Associates contracts with an overseas company O Ltd. for O Ltd. to provide services to P Associates in exchange for a fee. For the purpose of the Profit Fragmentation legislation the provision made between P Associates and O Ltd is treated as a provision made between A and O Ltd.