Corporation Tax Act 2010

General definitions

706 Meaning of “linked” person

(1) If there is a change in the ownership of a company, a person is “linked” to the company, for the purposes of this Chapter, if condition A or B is met.

(2) Condition A is that the person had control of the company at any time in the relevant period before the change.

(3) Condition B is that the person is a company of which a person mentioned in subsection (2) had control at any time in the period of 3 years before the change.

(4) For the meaning of—

(a) “control”, see section 707, and

(b) “the relevant period”, see section 709.

707 Meaning of “control”

(1) This section applies for the purposes of this Chapter.

(2) A person (“P”) is treated as having control of a company (“C”) if P—

(a) exercises,

(b) is able to exercise, or

(c) is entitled to acquire,

direct or indirect control over C’s affairs.

(3) In particular, P is treated as having control of C if P possesses or is entitled to acquire—

(a) 50% of the share capital or issued share capital of C,

(b) 50% of the voting power in C,

(c) so much of the issued share capital of C as would, on the assumption that the whole of the income of C were distributed among the participators, entitle P to receive the greater part of the amount so distributed, or

(d) such rights as would entitle P, in the event of the winding up of C or in any other circumstances, to receive the greater part of the assets of C which would then be available for distribution among the participators.

(4) Any rights that P or any other person has as a loan creditor are to be disregarded for the purposes of the assumption in subsection (3)(c).

(5) If two or more persons together satisfy any of the conditions in subsections (2) and (3) and do so because they acted together to put themselves in a position where they will in fact satisfy the condition, each of them is treated as having control of C.

(6) In this section—

• “loan creditor” has the meaning given by section 453, and

• “participator” has the meaning given by section 454.

(7) See also section 708 (rights to be attributed for the purposes of this section).

708 Rights to be attributed for the purposes of section 707

(1) This section applies for the purposes of section 707.

(2) A person is treated as entitled to acquire anything which the person—

(a) is entitled to acquire at a future date, or

(b) will at a future date be entitled to acquire.

(3) If a person—

(a) possesses any rights or powers on behalf of another person (A), or

(b) may be required to exercise any rights or powers on A’s direction or behalf,

those rights or powers are to be attributed to A.

(4) There may also be attributed to a person all the rights and powers—

(a) of any company of which the person has, or the person and associates of the person have, control,

(b) of any two or more companies within paragraph (a),

(c) of any associate of the person, or

(d) of any two or more associates of the person.

(5) The rights and power which may be attributed under subsection (4)—

(a) include those attributed to a company or associate under subsection (3) but

(b) do not include those attributed to an associate under subsection (4).

(6) Such attributions are to be made under subsection (4) as will result in C being treated as under the control of 5 or fewer participators if it can be so treated.

(7) In this section—

• “associate” has the meaning given by section 448, and

• “participator” has the meaning given by section 454.

709 Meaning of “the relevant period”

(1) This section applies for the purposes of this Chapter.

(2) “The relevant period”, in relation to a change in the ownership of a company, means the period of 3 years before the change.

(3) But if in the period of 3 years before the change (“the later change”) there was another change in the ownership of the company (“the earlier change”), “the relevant period”, in relation to the later change, means the period between the earlier change and the later change.