Section 25: Associated companies
99.This section defines “associated company” for the purpose of section 24. It is based on section 13 of ICTA.
100.Subsection (1) sets out the position if a company is an associated company for any part of an accounting period. It counts as an associated company for the whole of the accounting period.
101.Subsection (2) clarifies the position if more than one company is an associated company for different parts of an accounting period.
Example
Company A claims small profits rate for its accounting period from 1 January2009 to 31 December 2009.
A is associated with B in the period 1 January 2009 to 31 March 2009.
A is associated with C in the period 1 October 2009 to 31 December 2009.
A has two associated companies in its accounting period ending on 31 December2009, even though it never has more than one at any time.
102.Subsection (3) is the rule that associated companies that carry on no business are ignored. The rule is modified by subsection (6).
103.Subsection (4) is the main rule for determining whether or not companies are “associated”, based on “control”.The rule is modified by subsection (6).
104.Subsection (5) defines “control” for the purpose of subsection (4). The definition is based on section 450 but is modified by subsection (6).
105.Subsection (6) introduces the special rules for associated companies in the next five sections.
