Transfer pricing and UTPP in the UK Finance Bill - more complexity and uncertainty

The UK Finance (No 2) Bill 2025-26 includes draft legislation amending the existing transfer pricing rules and replacing diverted profits tax (or ‘DPT’) with a new charge to corporation tax on unassessed transfer pricing profits (or ‘UTPP’). Both sets of measures were well trailed and consulted upon, as discussed in our previous article on these changes available here.

 In the briefing available at the link below, Sarah Bond, Edward Buxton and David Haughey from our London tax team discuss the updated legislation included in the Finance Bill. It is highlighted that the stated intention was to simplify and update the relevant rules. However, the new rules introduce significant complexity and uncertainty, especially around the participation condition and when the new UTPP charge will apply, with an unwelcome reliance on guidance to clarify the intended target of the rules.

This briefing was originally published in Tax Journal on 30 January 2026.