The UK tax authority, HMRC, has published draft legislation that amends certain aspects of the rules on transfer pricing and diverted profits tax (or ‘DPT’). In the briefing available at the link below, Sarah Bond and Benjamin Crompton from our London tax team discuss the proposed changes.

The transfer pricing changes affect UK-UK transfer pricing requirements, the participation condition, the treatment of guarantees and the valuation of IFAs. DPT is to be replaced with a similar, but subtly different, charge to corporation tax on “unassessed transfer pricing profits”. It is highlighted that, while the changes have been well trailed and the stated intention is merely to simplify and update the relevant rules, there are nevertheless a range of detailed new provisions for practitioners to consider.

This briefing was originally published in Tax Journal on 16 May 2025.