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HMRC internal manual

Company Taxation Manual

Close companies: tests: specific exceptions

CTA2010/S439 (1) & (2), CTA2010/S444 (1), (2) & (3) &CTA2010/S446 (1) & (6) (formerly ICTA88/S414 (1), (5), & ICTA88/S415 (1))

The following cannot be close companies:

  1. A company not resident in the UK. (Thus none of the provisions regarding close companies applies to a non-resident company trading in the UK through a branch or agency in the UK - see CTM34210.)
  2. A society registered under the Industrial and Provident Societies Acts.
  3. A building society.
  4. A company controlled by or on behalf of the Crown and not otherwise a close company (see CTM60270).
  5. Certain companies controlled by other companies which are not themselves close companies (see CTM60290).
  6. Certain ‘quoted’ companies in which the ‘public’ holds 35% or more of the voting power (see CTM60310).

If a company is within (a) to (c) above, none of the following guidance is relevant because such a company cannot be a close company whoever controls it or is entitled to its income. The application of (d) to (f), however, involves the concept of control, and is considered in more detail in CTM60260 onwards.