DISTINCTLY DISADVANTAGED

摘要

HMRC has issued draft legislation to prevent individuals from claiming transfer pricing compensating adjustments where the counterpart to the transaction is a company. The changes are aimed at two scenarios in particular which HMRC considers a misuse of the compensating adjustments mechanism. To some of those who may be affected, the government's announcement that it is clamping down on what it sees as the misuse of the transfer pricing compensating adjustment claim mechanism will not be a surprise. Given the growing number of claims for compensating adjustments by individuals in recent years, it is worth looking in more detail at the two scenarios on which HMRC is focusing its attention, and recapping on some of the background.