FM 8 Transactions between group companies: income
When this section applies


This section applies when a company that is part of a consolidated group derives an amount of income from a transaction or arrangement with another company in the same consolidated group, and the amount would not be income if the consolidated group were 1 company.

Excluded income


The amount is excluded income of the company under section CX 60 (Intra-group transactions).

Exclusion of certain amounts


Despite subsection (2), this section does not apply to—


an amount arising from the disposal of the company’s trading stock; or


an amount arising under section EW 31 (Base price adjustment formula) from—


the disposal of a financial arrangement to which the financial arrangements rules apply; or


the remission of a financial arrangement to which the financial arrangements rules apply, if the parties were not consolidated group companies for the whole term of the arrangement; or


a dividend under section CD 4(1) (Transfers of value generally) between group companies arising from the release of an obligation to repay money lent before the companies are treated under section FM 35 as part of the consolidated group.

Defined in this Act: amount, arrangement, company, consolidated group, dividend, excluded income, financial arrangement, financial arrangements rules, income, money lent, pay, trading stock

Compare: 2004 No 35 s HB 2(1)(a)

Section FM 8(3)(b)(ii): amended (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years, except for a tax position that is inconsistent with subsection (1) and is taken in a tax return filed before 14 September 2011), by section 72(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).