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HMRC internal manual

Company Taxation Manual

Corporation Tax: small profits relief: association through a loan creditor

A loan creditor may have control of a company under CTA10/S450 (3)(d) but CTA10/S29 (formerly ESCC9) may nevertheless prevent two companies from being regarded as associated where:

  • there is common control of two companies by a single loan creditor, or
  • a loan creditor company has control of another company.

This will be so where control or common control arises only by under CTA10/S450 (3)(d) or its predecessor and, the loan creditor is either:

  • not a close company, or
  • the loan relationships arose in the ordinary course of business and there are no past or present connections between the companies, apart from the loans which would otherwise establish control.

For the meaning of ‘control’ see CTM60230.