Part 5Loan Relationships

Chapter 8Connected parties relationships: late interest

376Interpretation of section 375

(1)

For the purposes of section 375 and this section, F1Chapter 2 of Part 10 of CTA 2010 (meaning of “close company”) applies with the omission of section 442(a) (exclusion of non-resident companies).

(2)

A person who is a participator in a company which controls another company is treated for the purposes of section 375 and this section as being a participator in that other company also.

(3)

Subject to that, in section 375 and this section “participator”, in relation to a company, means a person who is a participator in the company F2within the meaning given by section 454 of CTA 2010, but not a person who is F3such a participator just because of being a loan creditor of the company.

(4)

Section 472 (meaning of “control”) applies for the purposes of section 375 and this section.

(5)

In section 375—

“CIS-based close company” means a company which would not be a close company apart from the rights and powers of one or more partners in a CIS limited partnership being attributed to another of the partners under F4section 451(4) to (6) of CTA 2010 because of section 448(1)(a) of that Act,

“CIS limited partnership” means a limited partnership—

(a)

which is a collective investment scheme, or

(b)

which would be a collective investment scheme if it were not a body corporate,

“non-qualifying territory” has the meaning given by F5section 173 of TIOPA 2010,

F6 “resident for tax purposes” means liable, under the law of the non-qualifying territory, to tax there by reason of domicile, residence or place of management, and

“small or medium-sized enterprise” has the meaning given by F7section 172 of TIOPA 2010.

F8(6)

For the purposes of section 375, a non-qualifying territory is “non-taxing” if companies are not under its law liable to tax by reason of domicile, residence or place of management.