Income Tax Act 2007 section 517U

Related parties

Section 517U defines when two persons are treated as "related parties" for the purposes of the provisions taxing profits and gains from disposals concerned with UK land.

• Two persons are related if they are consolidated for accounting purposes, if the participation condition is met, or if the 25% investment condition is met
• Consolidation covers cases where financial results are required to be, would but for an exemption be required to be, or are in fact included in group accounts under the Companies Act 2006 or equivalent overseas legislation
• The participation condition is met where, within six months, one party directly or indirectly participates in the management, control or capital of the other, or a common person participates in both
• The 25% investment condition is met where one party holds a 25% investment in the other, or a third person holds a 25% investment in both