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HMRC internal manual

Corporate Finance Manual

Old rules: loan relationships: connected persons: connection through control

Connection through control

This guidance applies only to accounting periods starting before 1 January 2005 

Companies were connected under FA96/S87(3) where at any time in an accounting period

  • one party to the loan relationship controlled the other, or
  • the two parties were under common control.

There was an exception: FA96/S87(4) stated that companies were not connected if they were under the common control of

  • the Crown
  • a Minister of the Crown
  • a government department
  • a Northern Ireland department
  • a foreign sovereign power
  • an international organisation (defined at FA96/S103 as one to which two or more sovereign powers, or their governments, belong), or
  • Scottish Ministers (S117 Scotland Act 1998).

These rules are now at CTA09/S466 and are essentially unchanged (CFM35110).