23(1)This paragraph applies where a company (“the service provider”) provides services or facilities for a business carried on by another person.U.K.
(2)Providing those services or facilities is an excluded activity if—
(a)the business consists to a substantial extent in carrying on excluded activities within any of sub-paragraphs (a) to (k) of paragraph 16, and
(b)a controlling interest in the business is held by a person (other than a company of which the service provider is a subsidiary) who also has a controlling interest in the business carried on by the service provider.
(3)Sub-paragraphs (4) to (6) explain what is meant by a controlling interest in a business for the purposes of sub-paragraph (2)(b).
(4)In the case of a business carried on by a company, a person (“P”) has a controlling interest in the business if—
(a)P controls the company,
(b)the company is a close company and P, or an associate of P's, is a director of the company and either—
(i)is the beneficial owner of more than 30% of the ordinary share capital of the company, or
(ii)is able (directly or through the medium of other companies or by any other indirect means) to control more than 30% of that share capital, or
(c)not less than half of the business could, in accordance with [F1section 942 of CTA 2010 (options for purposes of ownership condition)], be regarded as belonging to him for the purposes of [F2section 941 of that Act (trade transfers without change of ownership: ownership condition)].
(5)In any other case, a person has a controlling interest in a business if that person is entitled to not less than half—
(a)of the assets used for the business, or
(b)of the income arising from it.
(6)For the purposes of sub-paragraph (4)(a) the question whether a person controls a company is to be determined in accordance with [F3sections 450 and 451 of CTA 2010] (“control” in the context of close companies).
(7)For the purposes of this paragraph any rights or powers of a person who is an associate of another person are to be attributed to that other person.
(8)In this paragraph—
“associate” has the meaning given [F4by section 448 of CTA 2010] (expressions relating to close companies), except that in [F5that section as it applies] for the purposes of this paragraph “relative” does not include a brother or sister;
“business” includes any trade, profession or vocation;
“director” is to be construed in accordance with [F6section 452 of CTA 2010] (expressions relating to close companies).
Textual Amendments
F1Words in Sch. 5 para. 23(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(a)(i) (with Sch. 2)
F2Words in Sch. 5 para. 23(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(a)(ii) (with Sch. 2)
F3Words in Sch. 5 para. 23(6) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(b) (with Sch. 2)
F4Words in Sch. 5 para. 23(8) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(c)(i) (with Sch. 2)
F5Words in Sch. 5 para. 23(8) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(c)(ii) (with Sch. 2)
F6Words in Sch. 5 para. 23(8) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 399(4)(d) (with Sch. 2)