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Associated companies: regulations

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The Corporation Tax Act 2010 (Factors Determining Substantial Commercial Interdependence) Order, SI 2011/1784, sets out the factors to be taken into account in determining whether a relationship between two companies amounts to ‘substantial commercial interdependence’ for the purposes of CTA 2010 s 27 (attribution to persons of rights and powers of their associates).

FA 2011 s 55 substitutes a new CTA 2010 s 27  for accounting periods ending on or after 1 April 2011.

‘[Section 27 previously automatically attributed, between connected persons, rights held in the companies, leading to companies being associated by mere accident of circumstance,’ HMRC said. ‘Where companies are determined to be associated, this may lower the profit threshold at which they fall within the main rate of corporation tax.’