TTM13300 - Partnerships: The ring fence
Transfer pricing
The transfer pricing provisions described in TTM07300 will apply to certain transactions between a partnership and its partners if that partnership includes both a tonnage tax partner and a non-tonnage tax partner.
Transactions with tonnage tax partner
The transfer pricing rules will apply to transactions between a tonnage tax company and a partnership if:
- that tonnage tax company is a ‘major participator’ in the partnership, and
- the partnership also includes a non-tonnage tax partner who is also a ‘major participator’.
Transactions with non-tonnage tax partner
The transfer pricing provisions will also apply to transactions between a non-tonnage tax company and a partnership if:
- that non-tonnage tax company is a ‘major participator’ in the partnership, and
- the partnership includes a tonnage tax partner who is also a ‘major participator’.
Major participator
The definition of ‘major participator’ is in TIOPA10/S160 (3) to (5). Broadly, the effect of this is that two partners will be major participators in a partnership if they each have at least a 40% interest.
References
| FA00/SCH22/PARA58 (transfer pricing across the ring fence) | TTM17331 |
| SI00/2303/REG13 (transactions between partnership and partner) | TTM18013 |