Income and Corporation Taxes Act 1988

416 Meaning of “associated company” and “control”. U.K.

(1) M1 For the purposes of this Part,except paragraphs 2and 9(1)(a), (2)(a)and (3)(a)of Schedule 19 F1 , a company is to be treated as another’s “associated company” at a given time if, at that time or at any other time within one year previously, one of the two has control of the other, or both are under the control of the same person or persons.

(2) M2 For the purposes of this Part, a person shall be taken to have control of a company if he exercises, or is able to exercise or is entitled to acquire, direct or indirect control over the company’s affairs, and in particular, but without prejudice to the generality of the preceding words, if he possesses or is entitled to acquire—

(a) the greater part of the share capital or issued share capital of the company or of the voting power in the company; or

(b) such part of the issued share capital of the company as would, if the whole of the income of the company were in fact distributed among the participators (without regard to any rights which he or any other person has as a loan creditor), entitle him to receive the greater part of the amount so distributed; or

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

(3) Where two or more persons together satisfy any of the conditions of subsection (2) above, they shall be taken to have control of the company.

(4) For the purposes of subsection (2) above a person shall be treated as entitled to acquire anything which he is entitled to acquire at a future date, or will at a future date be entitled to acquire.

(5) M3 For the purposes of subsections (2) and (3) above, there shall be attributed to any person any rights or powers of a nominee for him, that is to say, any rights or powers which another person possesses on his behalf or may be required to exercise on his direction or behalf.

(6) For the purposes of subsections (2) and (3) above, there may also be attributed to any person all the rights and powers of any company of which he has, or he and associates of his have, control or any two or more such companies, or of any associate of his or of any two or more associates of his, including those attributed to a company or associate under subsection (5) above, but not those attributed to an associate under this subsection; and such attributions shall be made under this subsection as will result in the company being treated as under the control of five or fewer participators if it can be so treated.

Textual Amendments

F1 Words repealed by 1989 s. 187 and Sch. 17 Part v in relation to accounting periods beginning after 31 March 1989

Modifications etc. (not altering text)

C1 S. 416 applied (with modifications) by Finance Act 1991 (c. 31, SIF 63:1), s. 89(1), Sch. 16 para. 10(9)

S. 416 applied (with modifications) by Finance Act 1981 (c. 35, SIF 63:2), s. 82A(11)(13) (in relation to payments received on or after 19.3.1991) (as inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 91, Sch. 18 para. 4)

C2 S. 416 applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 86(5), 288(1), 289, Sch. 5 paras. 2(8)(9), 8(8), 9(9)(10) (with ss. 60, 101(1), 171, 201(3))

S. 416 applied (1.10.1992) by S.I. 1992/1725 (N.I. 15), art. 62(4); S.R. 1992/402, art. 2(a)

C3 S. 416 applied (17.12.1996) by Housing Grants, Construction and Regeneration Act 1996 (c. 53), ss. 54(2), 150(3); S.I. 1996/2842, art. 3

C4 S, 416 applied (N.I.) (1.10.2003 for specified purposes and 1.12.2003 otherwise) by The Housing (Northern Ireland) Order 2003 (S.I. 2003/412), arts. 1(3), 85(2); S.R. 2003/270, art. 2(4), Sch. 3

C5 S. 416(2)-(6) applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 184(1)(b), 289 (with ss. 60, 101(1), 171, 201(3))

C6 S. 416(2)-(6) applied (29.4.1996) by Finance Act 1996 (c. 8), s. 87(6) (with Schs. 10, 11)

C7 S. 416(2)-(6) applied (with effect in accordance with Sch. 9 para. 17(1) of the affecting Act) by Finance Act 1996 (c. 8) Sch. 9 para. 17(9)

C8 S. 416(2)-(5) applied (1.3.1996) by Gas Act 1995 (c. 45), ss. 12(7), 18(4) (with Sch. 5 para. 1); S.I. 1996/218, art. 3

C9 S. 416(2)-(5) applied (10.6.1996) by The Gas (Northern Ireland) Order 1996 (S.I. 1996/275), arts. 1(2), 39(7) (with art. 71); S.R. 1996/216, art. 2 (with arts. 3, 4)

C10 S. 416(2)-(5) applied (with modifications) by Gas Act 1986 (c. 44), s. 19E(4) (as inserted (10.8.2000) by The Gas (Third Party Access and Accounts) Regulations 2000 (S.I. 2000/1937), Sch. 2 para. 1)

C11 S. 416(2)-(5) applied (with modifications) by Petroleum Act 1998 (c. 17), s. 17E(7) (as inserted (10.8.2000) by The Gas (Third Party Access and Accounts) Regulations 2000 (S.I. 2000/1937), Sch. 4 para. 4)

C12 S. 416(2)-(6) applied (with modifications) (with application in accordance with s. 63(4) of the affecting Act) by Finance Act 2000 (c. 17), Sch. 15 para. 8(2)-(5)

C13 S. 416(2)-(6) applied (with application in accordance with s. 63(4) of the affecting Act) by Finance Act 2000 (c. 17), Sch. 15 para. 20; and s. 416(2)-(6) applied by that para. 20 as amended by Finance Act 2004 (c. 12), Sch. 20 paras. 4, 15

C14 S. 416(2)-(6) applied (with application in accordance with s. 63(4) of the affecting Act) by Finance Act 2000 (c. 17), Sch. 15 para. 33(5)

C15 S. 416(2)-(6) applied by Finance Act 1996 (c. 8), Sch.15 para. 11(2D)(a) (as inserted (with effect in accordance with s. 82(2) of the 2002 amending Act) by Finance Act 2002 (c. 23), Sch. 25 para. 41(2))

C16 S. 416(2)-(6) applied (with effect in accordance with Sch. 29 Pt. 14 of the affecting Act) by Finance Act 2002 (c. 23), Sch. 29 para. 59(4)

C17 S. 416(2)-(6) applied by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 5 para. 10(3) (as substituted (with effect in accordance with s. 96(6) of the 2004 amending Act) by Finance Act 2004 (c. 12), s. 96(3))

C18 S. 416(2)-(6) applied (with effect in accordance with s. 77 of the affecting Act) by Finance Act 2004 (c. 12), Sch. 11 para. 4(2); S.I. 2006/3240, art. 2

C19 S. 416(2)-(6) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by Corporation Tax Act 2009 (c. 4), s. 784(6) (with Sch. 2 Pts. 1, 2)

Marginal Citations

M1 Source—1970 s.302(1); 1972 Sch.24 21

M2 Source—1970 s.302(2)-(4); 1972 Sch.17 5

M3 Source—1970 s.302(5), (6)