SCHEDULES

SCHEDULE 4Avoidance involving profit fragmentation arrangements

3Transfer of value deriving directly or indirectly from a business

1

In determining whether value deriving directly or indirectly from a business is transferred from the resident party to the overseas party, account is to be taken of any method, however indirect, by which—

a

any property or right is transferred or transmitted, or

b

the value of any property or right is enhanced or diminished.

2

Sub-paragraph (1) applies in particular to—

a

sales, contracts and other transactions made otherwise than for full consideration or for more than full consideration,

b

any method by which any property or right, or the control of any property or right, is transferred or transmitted by assigning—

i

share capital or other rights in a company,

ii

rights in a partnership, or

iii

an interest in settled property,

c

the creation of an option affecting the disposition of any property or right and the giving of consideration for granting it,

d

the creation of a requirement for consent affecting such a disposition and the giving of consideration for granting it,

e

the creation of an embargo affecting such a disposition and the giving of consideration for releasing it, and

f

the disposal of any property or right on the winding up, dissolution or termination of a company, partnership or trust.

3

Value may be traced through any number of individuals, companies, partnerships, trusts and other entities or arrangements.

4

The property held by a company, partnership, trust or other entity or under any arrangements must be attributed to the shareholders, partners or members, beneficiaries or other participants at each stage on a just and reasonable basis.