Corporation Tax Act 2009 section 473

Meaning of "major interest"

Section 473 defines what it means for one company to have a "major interest" in another company for the purposes of the loan relationships rules.

• Company A has a major interest in Company B where A and one other person C together control B, and each holds at least 40% of the holdings, rights and powers that give rise to that control
• Shares held as trading stock (where a profit on sale would be a trading receipt) are excluded from the 40% test, unless they are assets of an insurance company's long-term business
• Two companies are "connected" for these purposes if one controls the other, or both are controlled by the same company
• Where two or more persons taken together have the power to govern a company's affairs, they are treated as having control of that company for the purposes of the major interest test