PART XIX SUPPLEMENTAL
Interpretation
839 Connected persons.
M1(1)
For the purposes of, and subject to, the provisions of the F1Corporation Tax Acts which apply this section, any question whether a person is connected with another shall be determined in accordance with the following provisions of this section (any provision that one person is connected with another being taken to mean that they are connected with one another).
(2)
F3(3)
A person, in his capacity as trustee of a settlement, is connected with—
(a)
any individual who in relation to the settlement is a settlor,
(b)
any person who is connected with such an individual, F4. . .
(c)
any body corporate which is connected with that settlement,
F5(d)
if the settlement is the principal settlement in relation to one or more sub-fund settlements, the trustees of the sub-fund settlements, and
(e)
if the settlement is a sub-fund settlement in relation to a principal settlement, the trustees of any other sub-fund settlements in relation to the principal settlement.
(3A)
For the purpose of subsection (3) above a body corporate is connected with a settlement if—
(a)
it is a close company (or only not a close company because it is not resident in the United Kingdom) and the participators include the trustees of the settlement; or
(b)
it is controlled (within the meaning of section 840) by a company falling within paragraph (a) above.
F6(3B)
For the purpose of subsection (3) above—
(a)
“settlement” has the same meaning as in section 620 of ITTOIA 2005,
(b)
“trustee”, in relation to a settlement in relation to which there would be no trustees apart from this paragraph, means any person—
F7(i)
in whom the property comprised in the settlement is for the time being vested, or
(ii)
in whom the management of that property is for the time being vested,
and
(c)
“principal settlement” and “sub-fund settlement” have the meaning given by paragraph 1 of Schedule 4ZA to the 1992 Act.
(4)
Except in relation to acquisitions or disposals of partnership assets pursuant to bona fide commercial arrangements, a person is connected with any person with whom he is in partnership, and with the F2spouse or civil partner or relative of any individual with whom he is in partnership.
(5)
A company is connected with another company—
(a)
if the same person has control of both, or a person has control of one and persons connected with him, or he and persons connected with him, have control of the other; or
(b)
if a group of two or more persons has control of each company, and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he is connected.
(6)
A company is connected with another person if that person has control of it or if that person and persons connected with him together have control of it.
(7)
Any two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as connected with one another and with any person acting on the directions of any of them to secure or exercise control of the company.
(8)
In this section—
“company” includes any body corporate F8(including an open-ended investment company) or unincorporated association, but does not include a partnership, and this section shall apply in relation to any unit trust scheme as if the scheme were a company and as if the rights of the unit holders were shares in the company;
“control” shall be construed in accordance with section 416; and
“relative” means brother, sister, ancestor or lineal descendant.
In relation to any period during which section 470(2) has effect the reference above to a unit trust scheme shall be construed as a reference to a unit trust scheme within the meaning of the M2Prevention of Fraud (Investments) Act 1958 or the M3Prevention of Fraud (Investments) Act (Northern Ireland) 1940.