Corporation Tax Act 2010 section 408

"Associated company"

Section 408 defines what "associated company" means for the purposes of the corporation tax rules in this chapter, including how control and consortium membership determine association.

• Two companies are associated if, at the start of any given day, one controls the other or both are controlled by the same person or persons, using the "control" definition from the close companies rules in section 450.
• Where a company is owned by a consortium, or is a qualifying 75% subsidiary of a consortium-owned company, the relevant consortium members and their own associated companies are also treated as associated companies of that consortium company.
• A consortium member is a "relevant" member on a particular day if it is a member at the start of that day, a qualifying change of ownership occurs in relation to the consortium company on that day, and the member is the entity treated as "E" under section 394 (consortium relationships).
• The number of associated companies matters because it affects the thresholds at which different rates of corporation tax apply — the more associated companies, the lower the thresholds for each individual company.