PART 3A

Companies with small profits

The lower limit and the upper limit

Association through a loan creditor
18I
1
A company (“A”) is not under the control of another company (“B”) for the purposes of section 18E(4) if—
a
B is a loan creditor of A,
b
there is no other connection between A and B, and
c
either—
i
B is not a close company, or
ii
B's relationship to A as a loan creditor arose in the ordinary course of a business which B carries on.
2
Subsection (3) applies if—
a
two companies (“
A
” and “
B
”) are controlled by the same person who is a loan creditor of each of them,
b
there is no other connection between A and B, and
c
either—
i
the loan creditor is a company which is not a close company, or
ii
the loan creditor's relationship to each of A and B as a loan creditor arose in the ordinary course of a business which the loan creditor carries on.
3
In determining for the purposes of this Part whether A and B are associated with each other, rights which the loan creditor has as a loan creditor of A, or as a loan creditor of B, are ignored.
4
In subsection (2)(a) “
control
” has the same meaning as in section 18E(4).
5
In this section—
a
“
connection
” includes a connection in the past as well as a connection in the present, and
b
references to a connection between two companies include any dealings between them.
6
In this section references to a loan creditor of a company are to be read in accordance with section 453.
Pt. 3A inserted (with effect in accordance with Sch. 1 para. 34 of the amending Act) by Finance Act 2021 (c. 26), Sch. 1 para. 3
Pt. 3A applied (with effect in accordance with Sch. 1 para. 33 of the amending Act) by S.I. 1998/3175, reg. 2(2A) (as inserted by Finance Act 2021 (c. 26), Sch. 1 para. 13(2)(c))
Pt. 3A applied (with effect in accordance with Sch. 1 para. 33 of the amending Act) by 2001 c. 2, s. 99(4A) (as inserted by Finance Act 2021 (c. 26), Sch. 1 para. 16(3))
Pt. 3A excluded (9.12.2021) by S.I. 2006/964, reg. 14DA(3)(a) (as inserted by The Authorised Investment Funds (Tax) (Amendment) Regulations 2021 (S.I. 2021/1270), regs. 1, 3(2))
Pt. 3A excluded (9.12.2021) by S.I. 2006/964, reg. 14B(3)(c) (as inserted by The Authorised Investment Funds (Tax) (Amendment) Regulations 2021 (S.I. 2021/1270), regs. 1, 4(b))