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HMRC internal manual

Company Taxation Manual

Corporation Tax: small profits rate: attribution to a person of rights and powers of associates - commercial interdependence with companies controlled by associates: accounting periods ending on or after 1 April 2011

CTA10/S27 and SI2011/1784, CTA10/S451

This legislation was introduced by FA11/S55 with effect in relation to accounting periods ending on or after 1 April 2011, subject to transitional provisions for an accounting period that begins before but ends after that date: FA11/S55 (3) to (5). For guidance on the position before that, see CTM03755.

The rights a person (or their nominee) possesses or is entitled to acquire are those relevant to deciding if a person or group of persons has control of a company.

The rights in separate companies held by persons with whom they are linked (that is associates - see CTA10/S448) are also attributed in some limited circumstances. This is when there is substantial commercial interdependence between the companies concerned.

The statutory rules are set out in CTA10/S27 and SI2011/1784. The practical application of the rules will vary depending on the facts of each particular case.

CTM03775+ gives more details and some examples.

If CTA09/S27 applies the rights attributed to a person are those of:

  • associates (see CTM60150), and
  • any companies which the person controls or the person and associates together control.

In both cases, the rights attributable will be inclusive of any rights of their nominees which must be attributed to the associate or company concerned - see CTM03740. Rights of ‘associates of associates’, that is, those attributed to an associate by virtue of CTA10/S27 are not included.