Part 8

Other reliefs
Chapter 1

Interest payments

Loans for interests in close companies etc

Meaning of “material interest” in section 393
394
1
For the purposes of section 393(4)(a) an individual has a material interest in a company if a relevant person meets condition A or B.
2
In this section “relevant person” means—
a
the individual, either alone or with one or more associates (see section 395), or
b
any associate of the individual with or without such other associates.
3
Condition A is that the relevant person is the beneficial owner of, or able directly or indirectly to control, more than 5% of the ordinary share capital of the company.
4
Condition B is that the relevant person possesses, or is entitled to acquire, such rights as would, in the event of the winding up of the company or in any other circumstances, give an entitlement to receive more than 5% of the assets which would then be available for distribution among the participators.
5
In this section—
- “control” is to be read in accordance with sections 450 and 451 of CTA 2010, and
- “participator” has the meaning given by section 454 of CTA 2010.
Word in s. 392 cross-heading inserted (with effect in accordance with s. 13(5) of the amending Act) by Finance Act 2014 (c. 26), s. 13(4)(b)
Words in s. 394(5) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 522(b) (with Sch. 2)
Words in s. 394(5) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 522(a) (with Sch. 2)