Commentary

D3.113 Exceptions from 'close company' status

Corporate tax
Corporate tax | Commentary

D3.113 Exceptions from 'close company' status

Corporate tax | Commentary

D3.113 Exceptions from 'close company' status

Certain companies are excluded from the definition of a close company. Some are blanket exclusions that depend on the type of company involved. Others are more general exclusions that apply depending upon the extent and nature of control exercised over the company.

Exclusions—specific types of companies

A company falling within any of the following is expressly declared not to be a close company1:

  1.  

    •     a company not resident in the UK

  2.  

    •     a registered society (D7.625), that is a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or under the Industrial and Provident Societies Act (Northern Ireland) 1969, or a European Co-operative Society (abbreviated to an SCE) formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Co-Operative Society

  3.  

    •     a building society within the meaning of the Building Societies Act 1986

Exclusions—certain types of control

Any type of company that is controlled as follows is excluded from close company status:

  1.  

    •     any company controlled by or on behalf of the Crown (see below)2

  2.  

    •     certain companies controlled by non-close (ie 'open') companies (see below)3

  3.  

    •     certain 'quoted' companies in which the 'public' holds 35% or more of the voting power (see below)4

HMRC accepts that a company is not close if it is controlled by5:

  1.  

    •     an overseas government, the Crown Agents for Overseas Governments and Administrations

  2.  

    •     local authorities or local authority associations exempt from UK tax, or

  3.  

    •     one of the

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