Taxes Consolidation Act 1997 section 111V

Meaning of marketable transferable tax credit

Section 111V defines what constitutes a marketable transferable tax credit for the purposes of the Pillar Two rules, setting out the legal transferability and marketability standards that must be met.

• A marketable transferable tax credit is one that can reduce a covered tax liability, is legally transferable to unconnected parties, and meets the marketability standard — otherwise it is a non-marketable transferable tax credit.
• The legal transferability standard requires that the originator can transfer the credit to an unconnected entity within the origination year or within 15 months of that year's end, and that any purchaser can similarly transfer it within the year of purchase.
• The marketability standard is met where the credit is sold to an unconnected entity at or above the marketable price floor within 15 months of the origination year end, or where similar credits trade at that level in the market.
• The marketable price floor is 80% of the credit's net present value, calculated by reference to the yield on a government debt instrument of equal or similar maturity (up to 5 years) issued in the same fiscal year.

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