Income Tax Act 2007 section 170

Persons interested in capital etc of company

Section 170 defines when an individual is treated as "connected" with the issuing company because of their interests in that company's share capital, voting power, assets, or control — or those of its subsidiaries.

• An individual is connected if they directly or indirectly hold, or are entitled to acquire, more than 30% of the ordinary share capital, issued share capital, or voting power of the issuing company or any of its subsidiaries
• A connection also arises where the individual has rights to receive more than 30% of the company's or subsidiary's assets on a winding up or in other circumstances, with equity holders and asset entitlements determined under Chapter 6 of Part 5 of the Corporation Tax Act 2010
• An individual is connected if they have control of the issuing company or any subsidiary, but merely holding subscriber shares in a company that has not yet begun trading does not in itself create a connection
• Future entitlements are treated as present entitlements, and the rights and powers of an individual's associates are attributed to that individual for the purposes of this test