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In the United Kingdom, an arms-length management organisation (ALMO) is a not-for-profit company that provides housing services on behalf of a local authority. Usually, an ALMO is set up by the authority to manage and improve all or part of its housing stock. Ownership of the housing stock itself normally stays with the local authority.
Prices charged are considered arm's length where the costs are allocated in a consistent manner among the members based on reasonably anticipated benefits. For instance, shared services costs may be allocated among members based on a formula involving expected or actual sales or a combination of factors.
The transactional net margin method (TNMM) in transfer pricing compares the net profit margin of a taxpayer arising from a non-arm's length transaction with the net profit margins realized by arm's length parties from similar transactions; and examines the net profit margin relative to an appropriate base such as costs, sales or assets.
The arm's length standard is instrumental to determine how much of the profits should be attributed to one entity and, consequently, the extent of a country's tax claim on such entity. The OECD has developed thorough guidelines on how the arm's length principle should be applied in this context. [4]
According to the arm's length principle, the price at which the transaction occurs is preferred for tax purposes, as it is a fair reflection of the value of the goods or services. [2] However, when the parties that negotiate a transaction are related, they may set an artificially lower price with the intention to minimise their taxes.
The BauGB defines the Verkehrswert or Marktwert (market value, both terms with identical meaning) as follows: "The market value is determined by the price that can be realized at the date of valuation, in an arm's length transaction, with due regard to the legal situation and the effective characteristics, the nature and lay of the premises or ...
The UK government's definition in 1997 of a non-departmental public body or quango was: A body which has a role in the processes of national government, but is not a government department or part of one, and which accordingly operates to a greater or lesser extent at arm's length from Ministers. [24]
The share price rose so rapidly that people began buying shares merely in order to sell them at a higher price. By inflating demand this in turn led to higher share prices. The "South Sea bubble" was the first speculative bubble the country had seen, but by the end of 1720, the bubble had "burst", and the share price sank from £1000 to under ...