Connection through a loan creditorU.K.
5(1)A company (“A”) is not under the control of another company (“B”) for the purposes of paragraph 2(1) if—U.K.
(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)Sub-paragraph (3) applies if—
(a)two companies (“A” and “B”) are under the control of 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 under paragraph 2(1) if A and B are connected with one another, rights which the loan creditor has as a loan creditor of A, or as a loan creditor of B, are ignored.
(4)In sub-paragraph (2)(a) “control” has the same meaning as in paragraph 2(1).
(5)In this paragraph—
(a)“close company” is to be read in accordance with Chapter 2 of Part 10 of CTA 2010 (see, in particular, section 439 of that Act),
(b)“connection” includes a connection in the past as well as a connection in the present and references to a connection between two companies include any dealings between them, and
(c)references to a loan creditor of a company are to be read in accordance with section 453 of CTA 2010.