Non-arm's length transactions may occur where a relationship exists between the parties to the transaction – for example, if the transaction involves:
- an associated company
- staff or shareholders
- suppliers (such as grape growers who supply grapes to wine producers).
If you have a non-arm's length transaction, your liability to WET (or entitlement to a WET credit) is taken to be the amount that it would have been if the transaction was at arm's length.
See alsoA wine's taxable value must be based on prices that would be used if the transaction was at arm's length.