Corporation Tax Act 2010 section 937K

Meaning of "associated with"

Section 937K defines when two companies are "associated with" each other for the purposes of this Part, by setting out five alternative conditions any one of which will establish the association.

• Two companies are associated if their financial results must be (or would be, but for an exemption) consolidated in group accounts under section 399 of the Companies Act 2006, or if they are connected for the relevant accounting period, or if one holds a major interest in the other.
• Association can also arise indirectly through a third company: if company A's results are consolidated with a third company (or company A is connected with a third company), and that third company holds a major interest in company B, then company A and company B are associated.
• The "consolidation condition" is met where two companies' financial results are required to be included in group accounts under the Companies Act 2006, or would be required but for an available exemption under that Act.
• The meanings of "connection" and "major interest" are drawn from the Corporation Tax Act 2009 loan relationships rules (sections 466 to 471 and sections 473 to 474 respectively).