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FM 19: Financial arrangements: transfer for fair and reasonable consideration
or “Rules for transferring financial arrangements within a company group for fair value”
You could also call this:

“Rules for transferring financial arrangements between companies in the same group at market value”

When a company (let’s call it Company A) gives a financial arrangement to another company (Company B), this section of the law applies if two things are true. First, both companies must be part of the same group at the time of the transfer. Second, two other sections of the law (section FM 18 and FM 19) don’t apply to this transfer.

If these conditions are met, the value of the financial arrangement is set at its market value on the day it’s transferred. This means the arrangement is treated as if it was sold for what it’s worth on that day.

This rule overrides two other sections of the law. It takes precedence over section EW 38, which talks about what happens when something is given away for free or for less than it’s worth. It also overrides section GB 21, which deals with actions that go against what the financial arrangement rules are meant to do.

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Next up: FM 21: Property transfers when companies leave consolidated groups

or “Rules for property when a company leaves a tax group”
Next

Part F Recharacterisation of certain transactions
Consolidated groups of companies: Accounting for particular property

FM 20Financial arrangements: transfer at market value

  1. This section applies in an income year in which a company (company A) transfers a financial arrangement to another company (company B) when—

  2. company A and company B are in the same consolidated group at the time of the transfer; and
    1. neither section FM 18 nor FM 19 applies to the transfer.

      1. The consideration for the transfer is the market value of the financial arrangement on the date of the transfer.

      2. This section overrides sections EW 38 (Consideration when disposal for no, or inadequate, consideration) and GB 21 (Dealing that defeats intention of financial arrangements rules).

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