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GB 2: Arrangements involving transfer pricing
or “Rules for fair pricing between related companies to prevent tax avoidance”
You could also call this:

“Rules for companies keeping past losses when ownership changes”

This section applies when someone sets up a plan involving shares in a company that has made losses. The plan might change how the shares work. It’s designed to make it look like the company still meets the rules about keeping its losses when ownership changes. But the real aim is to get around what the law intended.

If this happens, the law says the company that made losses won’t be allowed to keep those losses. It will be treated as if it didn’t meet the rules about ownership staying the same.

The law refers to other sections that explain more about these rules. These are section IA 5, which talks about restrictions on carrying forward losses when ownership changes, and section IP 3, which deals with what happens when ownership changes too much.

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Next up: GB 3BA: Arrangements for carrying forward loss balances: companies’ business activities

or “Rules for companies keeping past losses when ownership or business changes”
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Part G Avoidance and non-market transactions
Avoidance: specific

GB 3Arrangements for carrying forward loss balances: companies’ ownership

  1. This section applies when—

  2. a share in a company (the loss company) or another company has been subject to an arrangement, including an arrangement directly or indirectly altering rights attached to the shares; and
    1. the arrangement allows the loss company to meet the requirements of section IA 5(2) and (3) (Restrictions on companies’ loss balances carried forward: continuity of ownership); and
      1. a purpose of the arrangement is to defeat the intent and application of sections IA 5 and IP 3 (Ownership continuity breach: tax loss components of companies carried forward).

        1. The loss company is treated as not meeting the requirements of section IA 5(2) and (3) in relation to the share.

        Compare
        Notes
        • Section GB 3 heading: replaced (with effect on 1 April 2020), on , by section 75(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section GB 3(1)(b): amended (with effect on 1 April 2020), on , by section 75(2) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section GB 3(1)(c): amended (with effect on 1 April 2020), on , by section 111 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
        • Section GB 3(2): amended (with effect on 1 April 2020), on , by section 75(3) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).