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HMRC internal manual

VAT Insurance

HM Revenue & Customs
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Section 1122 of the Corporation Tax Act 2010: connected persons

The test in section 1122 of the Corporation Tax Act 2010 applies to determine whether persons are connected (section 1122 of the Corporation Tax Act 2010 superseded section 839 of the Taxes Act 1988). The following persons are treated as connected with you:

  • your husband, wife or civil partner
  • your relatives and their husbands, wives or civil partners
  • your husband’s, wife’s or civil partner’s relatives and their husbands, wives or civil partners
  • if you are in business in a partnership, your partners and their husbands, wives, civil partners and relatives
  • a company that you control, either by yourself or with any of the persons listed above, or
  • the trustees of a settlement of which you are a settlor, or of which a person who is still alive and who is connected with you is a settlor.

Relative means a brother, sister, ancestor or lineal descendant. It does not include nephews, nieces, uncles and aunts.

A company is connected with another company:

  • if the same person has control of both, or a person has control of one and persons connected with him (or he and persons connected with him) have control of the other, or
  • if a group of two or more persons have control of each company, and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he is connected.