Finance Act, 1980

Transactions between associated persons.

44.—(1) Where a company making a claim for relief under this Chapter (hereafter in this subsection referred to as “the buyer”) buys from another person (hereafter in this subsection referred to as “the seller”), and

(a) the seller has control over the buyer or, the seller being a body corporate or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and

(b) the price in the transaction is less than that which might have been expected to obtain if the parties to the transaction had been independent parties dealing at arm's length,

then the income or losses of the buyer and the seller shall be computed, for any purpose of the Tax Acts, as if the price in the transaction had been that which would have obtained if the transaction had been a transaction between independent persons dealing as aforesaid.

(2) Where a company making a claim for relief under this Chapter (hereafter in this subsection referred to as “the seller”) sells goods to another person (hereafter in this subsection referred to as “the buyer”) and

(a) the buyer has control over the seller or, the buyer being a body corporate or partnership, the seller has control over the buyer or some other person has control over both the seller and the buyer, and

(b) the goods are sold at a price greater than the price which they might have been expected to fetch if the parties to the transaction had been independent parties dealing at arm's length,

then the income or losses of the buyer and the seller shall be computed, for any purpose of the Tax Acts, as if the goods had been sold by the seller to the buyer for the price which they would have fetched if the transaction had been a transaction between independent persons dealing as aforesaid.

(3) For the purposes of subsection (2) a company shall be deemed to sell goods where and to the extent that, for the purposes of this Chapter, any amount receivable by it in payment for any trading activity is regarded as an amount receivable from the sale of goods and “seller” and “buyer” shall be construed accordingly.

(4) In this section “control” has the meaning assigned to it by section 158 of the Corporation Tax Act, 1976 .

(5) The inspector may by notice in writing require a company making a claim for relief under this Chapter to furnish him with such information or particulars as may be necessary for the purposes of this section, and section 41 (2) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this section.