Finance Act 2011

55 Companies with small profits: associated companies

(1) For section 27 of CTA 2010 (meaning of “associated company”: attribution to persons of rights and powers of their partners) substitute—

“27 Attribution to persons of rights and powers of their associates

(1) This section applies if—

(a) it is necessary to determine in accordance with section 25(4) and (5) whether a company is an associated company of another company, and

(b) the relationship between the two companies is not one of substantial commercial interdependence.

(2) In the application of section 451 (meaning of “control”: rights to be attributed) for the purposes of the determination, any person to whom rights and duties fall to be attributed under subsections (4) and (5) of that section is to be treated, for the purposes of those subsections, as having no associates.

(3) The Treasury may by order prescribe factors that are to be taken into account in determining whether a relationship between two companies amounts to substantial commercial interdependence for the purposes of this section.”

(2) The amendment made by this section has effect in relation to accounting periods ending on or after 1 April 2011.

(3) But a company may elect that the amendment made by this section is of no effect in relation to an accounting period that begins before that date.

(4) An election under subsection (3) must be made within one year from the end of the accounting period to which it relates.

(5) The first order under section 27(3) of CTA 2010 (as substituted by subsection (1) of this section) may be made so as to have effect in relation to accounting periods ending on or after 1 April 2011.