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HMRC internal manual

Corporate Finance Manual

Loan relationships: connected parties: late interest: participation: associates

Connection through participation: associate

The definition follows that used in CTA10/S448. The following are associates of the participator

  • business partner
  • relative
  • trustee(s) of a settlement by the participator or by a relative, living or dead, of the participator.

For this purpose, relative

  • includes spouse (unless divorced), parent or grandparent (or remoter ancestor), child or grandchild (or remoter descendant) and brother or sister
  • excludes in-laws, aunt or uncle, niece or nephew, cousin, stepsister or stepbrother, step-parents and common law spouse.

Where the participator has an interest in shares subject to a trust or part of the estate of a deceased person, the term ‘associate’ also includes

  • the trustee(s) of the settlement or the personal representative(s) of the deceased
  • (if the participator is a company) any other company with an interest in those shares.


Kit Gerrard lends £500,000 to PH Ltd, a close company. Kit owns no shares or other rights in the company. Kit’s brother, Guy Gerrard, owns 500 shares in PH Ltd.

Guy Gerrard is a participator in PH Ltd. Kit is Guy’s brother, and so is an associate of a participator and connected under CTA09/S375.