Corporation Tax Act 2010 section 457

Section 456: meaning of "material interest in a company"

Section 457 defines what it means for a person to have a "material interest" in a company for the purposes of the exceptions to the section 455 loan to participator charge set out in section 456.

• A person has a material interest if they (alone or with associates) beneficially own or control more than 5% of the company's ordinary share capital
• In the case of a close company, a material interest also exists where a person (alone or with associates) possesses or can acquire rights to receive more than 5% of the assets available for distribution on a winding up or in any other circumstances
• Associates are taken into account throughout — a person's own holdings are combined with those of their associates when testing the 5% threshold
• Control over shares can be direct or indirect, for example exercised through the medium of other companies