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HMRC internal manual

VAT Land and Property

Option to tax - anti-avoidance test: in what circumstances are persons 'connected'?

We use section 1122 of the Corporation Tax Act 2010 to decide whether persons are connected. However, from 1 August 2009 companies are not connected as a result of being under the control of the Crown, a Minister of the Crown, a government department or Northern Ireland department.

This change was introduced to avoid connection arising out of Government ownership of banks. Further details and examples of the most common types of connection are listed in section 13 of Notice 742A Opting to tax land and buildings.