Taxation (International and Other Provisions) Act 2010 section 200

Election to pay tax rather than make balancing payments

Section 200 allows a disadvantaged person, in the context of transfer pricing adjustments relating to securities, to elect to pay the advantaged person's resulting tax liability directly rather than making a balancing payment to that person.

• Where the pre-conditions in section 199 are met, the disadvantaged person may choose not to make a balancing payment to the advantaged person in connection with transfer pricing adjustments relating to a relevant security.
• Instead, the disadvantaged person takes on sole responsibility for paying the advantaged person's tax liability for the chargeable period, to the extent that liability arises from the arm's length pricing rules being applied to the relevant security.
• The terms "advantaged person", "disadvantaged person" and "relevant security" take their meanings from section 199, which sets out the pre-conditions for making this election.
• Further rules about how the election is made and what effect it has are contained in section 203.