Finance Act, 1977

Transactions between associated persons.

28.—(1) Where a company making a claim under this Chapter (referred to subsequently in this subsection as “the buyer”) buys goods from another person (referred to subsequently in this subsection 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 goods are sold at a price less 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.

(2) Where a company making a claim under this Chapter (referred to subsequently in this subsection as “the seller”) sells goods to another person (referred to subsequently in this subsection 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, for any purpose of the Tax Acts (including this Chapter), any amount receivable from the sale of the goods and the income or losses of the buyer and the seller shall be computed 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) In this section “control” has the meaning assigned to it by section 158 of the Corporation Tax Act, 1976 .

(4) The inspector may by notice in writing require a company carrying on a specified trade to furnish him with such information or particulars as may be necessary for the purposes of this section, and section 24 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.