Commentary

B2.109 Control and connected persons

Business tax
Business tax | Commentary

B2.109 Control and connected persons

Business tax | Commentary

B2.109 Control and connected persons

The concept of control and connected persons is used in many places in the legislation. Often a specific definition is given for a particular situation, but in the absence of that the following definitions will apply.

Control

General definition

For various income tax and corporation tax provisions, control means:

  1.  

    •     in relation to a body corporate: the power of a person to secure that the affairs of body corporate are conducted in accordance with the wishes of that person:

    1.  

      –     by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or

    2.  

      –     by virtue of any powers conferred by the articles of association or other documents regulating that or any other body corporate,

  2.  

    •     in relation to a partnership: the right to a share of more than one half of the assets, or of more than one half of the income, of the partnership1

Capital gains and close companies

'Control', for the purposes of close companies (see D3.103) and for capital gains, is construed in accordance with CTA 2010, ss 450 and 451: see D3.1032. The Court of Appeal held (in Steele3) that control over the company's affairs as defined in (what is now) CTA 2010, s 450 means control at the level of general meetings to make the ultimate decisions as to the business of the company.

Connected persons

General

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